Distinguish between Life Insurance and General Insurance.
There are many differences between life insurance and general insurance. Below are some of the differences:
| Point of Difference | Life Insurance | General Insurance |
|---|---|---|
| 1. Definition | The insurance that is done on human life is called life insurance. | Insurance that covers property damage is called general insurance. |
| 2. Nature of contract | Life insurance is an agreement to pay a certain amount of money for a certain period of time. | General insurance is a contract of indemnity. |
| 3. Term of Insurance | The term of life insurance should be long-term. | The term of general insurance is usually short-term. |
| 4. Purpose | The purpose of life insurance is to secure people’s futures and encourage investment. | In the case of general insurance, compensation is provided. |
| 5. Guaranteed payment | Payment is guaranteed on the death of the policyholder or within the specified period of the policy. | No compensation is provided unless there is a potential accident. The receipt of money is uncertain. |
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