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Insurance & Assurance
Insurance & Assurance
Insurance & Assurance
Insurance:
In the case of insurance, loss due to risk is
not certain to happen. Loss i.e., likely to
happen or not.
Assurance:
Loss due to risk is certain to happen. Risk of
death is bound to happen sooner or later.
Basis of Distinction: Subject Matter
Insurance:
Generally, goods or property of any other
kind are the subject matter of non-life
insurance.
Assurance:
Human life is the subject matter of life
insurance contract.
Basis of Distinction: Term of contract
Insurance:
Insurance contract is usually for one year.
Assurance:
In the case of life insurance contract, the
contract is a continuing contract, i.e., long
term contract.
Basis of Distinction: Contract of indemnity
Insurance:
Fire, Marine insurance and other contracts are
contract of indemnity.
Assurance:
It is not contract of indemnity.
Basis of Distinction: Insurable Interest
Insurance:
In Fire Insurance, insurable interest must be approved
both at the time of policy is effected and at the time
when loss occurred.
In Marine Insurance, it must be present only at the
time of loss occurring. It is not necessary at the time
of effecting the policy.
Assurance:
Insurable interest must be present only at the time of
taking out the policy, but need not have insurable
interest at the time of maturity of the policy.
Basis of Distinction: Insurance / Assurance
Insurance:
The term ‘Insurance’ is used to other kinds of
non-life insurance contracts.
Assurance:
The term ‘Assurance’ is referred only to Life
Insurance business.
Basis of Distinction: Surrendering the policy
Insurance:
In the case of marine and fire insurance, the
policy cannot be surrendered by the insured
before its maturity.
Assurance:
In life the insurance policy can be
surrendered by the assured before its
maturity.
Basis of Distinction:
Elements of Protection and/or Savings
Insurance:
In the case of fire and marine insurance,
insurance contain only the protection
elements.
Assurance:
Life Insurance contains both Protection and
Savings elements.
Insurance is a contract between two parties
Insurer and Insured person.
Assurance is a contract which guarantee the
certain amount on the happening of certain
event.
Difference between Insurance and Assurance
On the basis of
Certainty
Subject Matter
Term of contract
Contract of Indemnity
Insurable Interest
Insurance / Assurance
Surrendering the Policy
Elements of Protection and Savings
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