What are the key differences between Life and General Insurance?

Key Points

Life Insurance

General Insurance.

Meaning

It is an insurance contract, which covers the life-risk of the person insured.

It is an insurance that is not covered under Life insurance.

Form

It is a form of investment.

It is a contract of indemnity.

Term of Contract.

It's a long term contract.

It's a short term contract.

Premium

Premium has to be paid over the year.

Premium has to be paid lump sum.

Insurance claim

Insurable amount is paid either on the occurrence of the event, or on maturity.

Loss is reimbursed, or liability will be repaid on the occurrence of uncertain event.

Insurable Interest.

Must be present at the time of contract.

Must be present, at the time of contract and loss both.

Policy Value.

It can be done for any value based on the premium policy.

The amount payable under life insurance is confined to the actual loss suffered.