- Difference b/w both
- Basic parameters of both
- Types of both
Key Differences Between Life and General Insurance
Everyone seeks protection, whether it is financially, personally, or in wellbeing. When the topic of insurance arises, the first thing that springs to everyone's mind is safeguarding their financial future, protecting loved ones or some valuable tangible asset.
However, insurance is divided into two categories – life insurance and general insurance. Life insurance offers financial protection to loved ones upon the death of a policyholder or after a set period.
On the other hand, general insurance protects an individual's health or loss of some valuable tangible asset, such as a house or car. Stay tuned to learn more about the difference between life insurance and general insurance.
What are the types of Life Insurance?
Explore different types of Life Insurance, that feature all your future requirements:
Parameters |
Life Insurance |
General Insurance |
|---|---|---|
| Protection | Life insurance covers an individual's life and offers financial security to the family in the event of the policyholder's unfortunate demise. | Unlike life insurance, general insurance covers assets & individuals' health and offers protection against uncertainties of life such as accidents, theft, travel, health, vehicles, and home. |
| Cover | Under life insurance, the insurer pays the death benefit to the nominee when the policyholder passes away. | The insurer pays coverage in case any loss or damage occurs in the insured asset or case of hospitalization for medical emergencies. |
| Premiums | A life insurance premium is the amount you pay monthly or yearly to keep your insurance plan active. However, premiums may be estimated by a few factors, like risk, coverage amount, type of life insurance, etc. | The general insurance premium is the sum an individual must pay the insurer to keep their coverage active. However, the premium charges depend on various factors such as medical history, habits, profession, asset value, and lifestyle parameters. |
| PPT (Premium Payment Term) | You can choose the premium payment type, whether you wish to pay premiums annually, half-yearly, quarterly, monthly, or in a single-pay. | You can pay your premiums annually, half-yearly, quarterly, monthly, or lump sum. |
| Tenure | It is a long-term commitment that offers protection up to 99 years of age, depending on the plan. | It is typically a short-term plan with a tenure of one year and can be renewed if required. |
| Compensation Amount | The death benefit is given to the nominee when the policyholder passes away. | Unlike life insurance, in general insurance, the compensation amount is paid to an insured person if the insured asset is lost or damaged or if the insured person has health related issues. |
| Nominee | The nominee can be anyone in a blood relation, whether a spouse, parent, child, or sibling. However, it can be changed at any time throughout the policy term. | In general insurance, there are no beneficiaries. The insured person receives the sum insured. |
Types of Life Insurance and General Insurance
General Insurance and Life Insurance come with different types of plans that protect against various risks. Let's have a look at their types:
Life Insurance |
General Insurance |
|---|---|
| Term insurance | Health Insurance |
| Term insurance with return of premium | Motor Insurance |
| Unit Linked Insurance Plans | Travel Insurance |
| Endowment plans | Property Insurance |
| Retirement Plans | Commercial Insurance |
| Whole life insurance | Asset Insurance |
| Group life insurance | Pet Insurance |
| Child Insurance Plans | Bite-Sized Insurance |
Underwriting Difference Between Life Insurance and General Insurance
Parameters |
Life Insurance |
General Insurance |
|---|---|---|
| Complexity of Underwriting | The underwriting process in life insurance is more complex because it requires a more detailed assessment of the insured person's health, lifestyle, and other risk factors. | The General Insurance underwriting process is simpler because it only requires the risks involved in insuring people and assets. |
| Length of Underwriting | The life insurance underwriting process might be longer than the general insurance policy and may take several weeks to complete the underwriting procedure. | The general insurance policy underwriting process can often be approved within a matter of days. |
| Medical Examination | It is mandatory to do a medical examination because it is an important part of the underwriting process. It helps insurers to indicate the health risk of the policyholder and determine the appropriate premium and coverage level. | Unlike life insurance, there are plans in general insurance that do not need medical examinations before buying the policy. |
| Risk Assessment | The underwriting process for life insurance policies typically assesses the risk associated with a policyholder's overall risk of death or disability. | The general insurance policy underwriting process mainly assesses the risk associated with assent or health. |
Conclusion
In conclusion, life insurance provides protection against life risks, while general insurance provides protection against health or assets. Both insurance categories ensure a safe and secure future without emptying your resources or compromising your family's future.
Difference Between Life Insurance and General Insurance: FAQs
1. What is the difference between life insurance and general insurance?
Life insurance primarily offers life cover against policyholder death. On the other hand, general insurance offers compensation against loss of property or health conditions.
2. What is the coverage difference between life insurance and general insurance?
Life insurance coverage is provided to financially secure the insured person& 039;s family, while general insurance offers compensation for loss of property or health conditions.
3. Can I buy life insurance and general insurance together?
Life insurance and general insurance are separate products that are usually bought separately.
4. What is the premium difference between life insurance and general insurance?
Since both products serve different purposes, the premium difference between life and general insurance can& 039;t be compared. However, health insurance in general insurance is expensive than life insurance policies.
5. When does someone need life insurance?
If your family depends on your income and your death would create a financial burden for your family, then you must opt for life insurance to protect your family& 039;s financial future in your absence.
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Written By: Sahil Singh Kathait
A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.
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