Saturday, December 13, 2014

Difference between Life Insurance and General Insurance

General  ( Non Life ) Insurance                                                           Life Insurance
Indemnity : It Means the loss which has been                           Life Insurance policies are contracts 
occurred will be compensated to the extent of loss                    of assurance. The principle of 
It is applicable only for non life insurance except personal        Indemnity is not applicable for life 
 accident insurance                                                                        insurance

Uncertainty : In general  insurance contracts, the risk event     In the case of life insurance, there is 
protected against is uncertain                                                      no question whether the event death 
                                                                                                     would occur or not. Death is certain                                                                                                           once a person is born. What is                                                                                                                    uncertain is the time of Death
Increase in probability : The Probability of the                        The probability of death increases       happening of the event does not increase with time.                    with age

Short term : to be renewed every year / occasion                      Long Term : run for 10,20 or more                                                                                                              years

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