What is Life Insurance?

Life insurance policies pay a lump sum amount to the beneficiaries of the policyholder upon his death.
This payout is the death benefit. Often, the policyholder survives the policy period. The policyholder
then receives a maturity benefit. The insurer agrees to this in exchange for the premium that the
policyholder pays.

What is General Insurance?

All other forms of insurance belong to general insurance. Health and property insurance come under
general insurance. This type of insurance typically covers losses caused by theft or damage. In the case
of health insurance, the cover is for medical expenses. Rahul visited the Bajaj Finserv website as part of
his preliminary research on insurance plans. He found various sub-categories of general insurance. On
speaking with a Bajaj Finserv representative, he realised that each functions in its own way.

Key Points of Difference Between Life and General Insurance

Duration: This is the first and one of the most significant differences. A life insurance plan is a long-term
investment. In contrast, a general insurance plan is often a one-year contract. But there are exceptions.
You can have short-term life insurance plans. Meanwhile, some general insurance plans, such as health
plans, have longer durations.

Premiums: A life insurance premium is usually paid over many years. Some people pay the insurance
premium in one go. But that is not common practice. Most general insurance plans require you to pay
the premium in one go. This happens at the start of the policy.

Savings: Many life insurance plans also combine an element of savings. Say, you outlive the policy
period. You then receive a maturity benefit. This is essentially the premium that you paid over the years.
General insurance has no savings component. Even if you do not make a claim, you cannot get any part
of your premium back.

Purpose: The purpose of life insurance is to give a payout at the death of the policyholder. But you can
also get a payout at maturity. Some plans also give payouts at regular intervals, irrespective of any
emergency. The purpose of general insurance is more direct. A payout takes place only at the time of a
crisis, like an accident or a theft.

Life insurance and general insurance are completely different kinds of insurance. But the significance of
insurance remains unchanged. If you have no insurance yet, review your needs. Then shop around and
choose a few suitable life and general insurance plans. Insurance brings financial security to your life.
That is the ultimate purpose of insurance.

⦿ Fire insurance:
Fire insurance is an insurance that covers property, such as home, commercial shops or other fixed asset
or inventory protection against fire damages.
⦿ Marine insurance:
Marine insurance and marine cargo insurance cover the loss or damage of goods which are shipped
through the sea way or on inland waterways.regardless of the method of transit.marine cargo insurance
compensates the owner of cargo for losses incurred by ship wreck.

⦿ Crop insurance:
Crop insurance is purchased by farmers to protect themselves from various risks associated with
growing crops. the risks include crop loss or damage caused by weather, drought, insects, or crop
disease.