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Difference Between life and general insurance


Insurance Your Phone Is The Most Prized Possession, Suppose It Was Stolen Or Got Damage Wouldn’t It Be Difficult To Ask Your Parents For Another Phone Wouldn’t It Be Nice. If You Could Get Compensated For The Lost Phone This Can Happen To Insurance. What Is Insurance? Is A Process Which Combines The Risks Of Individuals Into a Group Using Funds Contributed By Members Of The Group To Pay For Losses. Insurance Is A Contract Between The Insurance Company And An Individual Or The Insured. The Insurance Company Promises To Be A Specified Amount To Be Insured In Return For The Consideration Of The Premium On The Happening Of A Certain Event. The Insurance Cannot Prevent Unwanted Events Of course Of Loss From Happening. But It Protects The Policyholder By Compensating Him The Promised Amount Of Loss, So If You Had In Insurance Cover On The Phone The Risk Of Losing The Phone And The Monetary Loss Associated Is Been Transferred To The Insurance Company But For A Price, Which Is Called Premium And Insurance Company Would Give You An Amount To Cover The Value Of The Phone. In Case The Phone Gets Lost Losing The Phone Is A Type Of Risk Means The Terms Of Suffering Loss Due To The Possibility Of Adverse Events Beyond The Control Of Men. The Events That Give Rise To Search Trees Are Called Herald Human Lies Individual Properties Industries Infrastructure And Other Assets May Be Destroyed Lost Or Made Non-functional Due To An Occurrence Of Floods Hurricanes Tornadoes Earthquake And Other Perils Of Nature.

 

In This Website, We Will Be Covering Following Topics For Insurance

  • What Is The Meaning Of Insurance?
  • Types Of Insurance.
  • Principles Of Insurance.
  • Difference Between Life Insurance And General Insurance.
  • Types Of Life Insurance.
  • Types Of General Insurance.

What Is The Meaning Of Insurance

An Arrangement By Which A Company Or The State Undertakes To Provide A Guarantee Of Compensation For Specified Loss, Damage, Or Illness, Or Death In Return For Payment Of A Specified Premium.

Two Different Types Of Insurance

  1. Life Insurance
  2. General Insurance (Non-Life Insurance)

 

1.Principles Of Insurance

  1. Principle Of Utmost Good Faith
  • According To This Principle, The Insurance Contract Must Be Signed By Both Parties (I.e Insurer And Insured) In An Absolute Good Faith Or Belief Or Trust, They Should Not Hide Anything From Each Other.

2.Principle Of Insurable Interest

  • The Principle Of Insurable Interest State That The Person Getting Insured Must-Have Insurable Interest In The Subject Of Insurance.

3.Principle Of Indemnity

  • According To The Principle Of Indemnity. An Insurance Contract Is Signed Only For Getting Protection Against Unpredicted Financial Losses Arising Due To Future Uncertainties.
    That Means That The Role Of The Insurance Is To Provide The Good To The Loss that Happened Inexpressibly.

4.Principle Of Contribution

  • It Applies To All Contracts Of Indemnity If The Insured Has Taken Out More Than One Policy On The Same Subject Matter.
  • According To This Principle, The Insured Can Claim The Compensation Only To The Extent Of Actual Loss Either From All Insurers Or From Any One Insurer.
    If One Insurance Pays Full Compensation Then That Insurers Can Claim Proportionate Claim From Other Insurance, So If Your Car Has Hundred Thousand Rupees Of Principle Indemnity Then You Can Take Maximum Of Two That Amount.

5. Principle Of Subrogation

  • According To The Principle Of Subrogation, When The Insured Is Compensated For The Losses Due To Damage To The To His Insured Property, Then The Ownership Rights Of Such Property Shifts To The Insurance.

6. Principle Of Loss Minimization

  • According To The Principle Of Loss Minimization, an Insured Must Always Try His Level Best To Minimise The Loss Of His Insured Property, In Case Of Certain Events Like A Fire Break Out Or Blast Etc. You Shall Call The Insured Person Shall Call The Police Or The Fire Brigade And He Should Put All His Efforts To Minimise The Loss To The Product For The Property.

7. Principle Of Causa Proxima (Nearest Cost)

  • Proximate Cause Is Concerned With How The Actual Loss Or Damage Happened To Insured Party And Whether It Is A Result Of An Insured Peril.
    It Looks For What Is The Reason Behind The Loss, Is That Is An Insured Perill Or Not.

Difference Between Life Insurance And General Insurance

Life Insurance Is An Insurance Contract, Which Covers The Life-risk Of The Person Insured. Where Is The General Insurance Is Anything Which Is Not Covered Under Life Insurance Like Motor, House Etc. Life Insurance Is A Form Of Investment. general Insurance Is Only A Contract Of Indemnity. Life Insurance Is For Long-term. General Insurance Is Short Term, For Safe For 2 Months, 1 Year, 3 Years. Life Insurance Premium Has To Be Paid Over The Year. However, In General Insurance Premium Has To Be Paid On Lump Sum. Life Insurance Amount Is Paid In The On The Occurrence On Of The Event, On Maturity. The General Insurance Laws Are Reimbursed Or Liability Will Be Repaid On The Occurrence Of Uncertain Events. Life Insurance Must Represent The Insurable Interest Must Be Present At The Time Of Contract. General Insurance The Interest Must Be Present, At The Time Of Contract As Well As At The Time Of Loss. Life Insurance It Can Be Done For Any Value Based On The Premium Policy. General Insurance The Amount Payable Under The Life Inch Under The Insurance Is Confined Is To The Actual Loss Suffered.

Types Of Life Insurance.

A. Term Insurance: It Is The Pure Insurance Form. It Pays Your Nominee The Sum Assured In Case Of Your Demise Within The Policy Term. It Does Not Have Any Sum Assured Or Maturity Amount. Premium Is Very Low.
B. Endowment Plans: These Are Insurance And Investment Plans. A Certain Portion Of The Premium Is Paid For Protection Of The Life And Rest Amount Is Invested In Low-Risk Debt Instrument.so At The Time Of Maturity, The Insured Person Gets A Predefined Amount.

C.unit Linked Insurance Plans: Ulips Offer Life Protection As Well As The Opportunity For Capital Appreciation By Investing In Various Forms Of Varying Degree Of Risk. Just Like Endowment Policies, In Ulips A Certain Portion Of The Premium Goes In Providing Life Cover. They Generally Invest In Equity Market, Therefore The Return Is Not Pre- Defined, It Depends On The Market Return. It Has Certain Lock In Period. Se Three Years Of 5 Year Up To That Time You Cannot Withdraw The Insurance.

Types Of General Insurance.

  1. health Insurance: A General Health Insurance Plan Is An Indemnity Plan That Pays For Hospitalisation Expenses Up To The Sum Insured. While You Can Avail A Standalone Health Policy, Family Floater Plans Provide Coverage To All The Members Of Your Family.
  2. motor Insurance: Motor Insurance Covers Your Vehicles Against Accidents Damaged, theft Vandalism, And So On. This Form Of Insurance Comes In Two Forms Comprehensive And Third Party, Comprehensive Covers 360 Degree Of Your Car Where Is Third-Party Gives You Protection From Third-party Term Is Happened To To Your Vehicle.
  3. Home Insurance: A Home Insurance Policy Protects Your Home And It It’s Belongings From The Damage Suffered Due To Man-made Or Natural Disasters. Some Home Insurance Policies Also Provide Coverage For Temporary Living Expenses In Case You Are Living On Rent, Due To Your Home Undergoing Renovation.
  4. travel Insurance: A Travel Insurance Policy Protects You Against Losses Suffered Due To Loss Of Damage Package Delete In Flights And Trips Cancellation When You Are Travelling Abroad In Some Cases If You Are Hospitalised While Travelling A Travel Insurance May Also Offer Cashless Hospitalization.

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