HOW IS LIFE INSURANCE DIFFERENT FROM OTHER

INSURANCE

Difference between life insurance and general insurance

1. Meaning and Coverage:
As the name suggests, life insurance covers the life of the assured, whereby in the event of his/her
premature demise, the nominee or beneficiary as stated on the policy is paid the sum assured by the
insurance company. So, life insurance covers your life, with some variants of the policy providing an
investment feature too. The policy also comes with a maturity benefit - if you, the policyholder, outlive the
policy period, you receive a maturity benefit, which is essentially a return on the premiumsyou paid
through the years. On the other hand, general insurance is a contract of indemnity which involves non-life
assets. Therefore, it includes all kinds of non-life insurance, namely motor insurance, travel insurance and
health insurance, among others. It compensates you for the damages it promises to cover, but has no
savings or investment tangent.
2. Purpose
The main purpose of life insurance is to provide for your family and dependents in your absence. Financial
independence for your family could mean helping them maintain their lifestyle, provide for kids’
education, square off your liabilities and provide for daily needs through the death benefit on such plans.
Essentially life insurance death benefit is paid out in case the policyholder dies, or the maturity benefit is
paid in the event that the policyholder survives the policy duration. On the other hand, general insurance
makes claims settlement and payouts in the event of an unexpected material loss such as accidental
damages or theft or disfigurement of vehicle or travel glitches. These are essential in the form of
compensation for the loss to the extent they are covered under the policy papers.
3. Duration of the policy:
By the nature of its coverage, life insurance is a long-term contract. You pay monthly premiums for a long
time until the policy reaches maturity. General insurance is a short-term contract. In the case of motor
insurance or health insurance, you may have to renew the policies on a yearly basis, with options for up to
3-years’ policies at once. Travel insurance would only last as long as its purpose - your travel - does. It will
require you to pay the entire premium up front.
4. Insurable Interest:
In the case of life insurance in India, the policyholder may likely only be present at the time of issuance of
the policy, because the claim occurs upon his/her death. For general insurance, it is imperative that the
policyholder is present both at the time of issuance of contract and at the time of loss/filing a claim.
5. Process of Claim payment:
Life insurance policies with investment elements, pay the amount on either maturity or on the occurrence
of the event. Under general insurance, claim for losses is filed whenever the event occurs. Due diligence is
carried out often to make sure the policyholder did everything to prevent the damage and only then the
claim is approved. This claim is also restricted to the amount of damage, whereas life insurance claim is
paid in full.
You can choose an appropriate online life insurance plan from a wide array of policies offered by Future
Generali, and depending on whether you want an element of investment, you can go for the Future
Generali Easy Invest Online Plan. Such a plan will also provide the flexibility to choose the period of
protection and the period of premium payment. If you are solely looking at long-term protection at
affordable rates, choose a term insurance plan. It is noble to make sure your family doesn’t suffer
financially in your absence!