Let’s further discuss life insurance vs general insurance.
Life Insurance and it’s WorkingLife insurance promises specific financial compensation to the beneficiary in case of the demise of the insured person. To avail the insurance benefits, the policyholder is liable to pay the premium amounts regularly and timely, as per the policies of the chosen plan. There are different types of life insurance policies available in the market based on various requirements:
- ULIP (Unit linked insurance plan)
- Child plans
- Endowment plans
- Whole life insurance plan
- Retirement plans
Term life insurance plan
A term life insurance is one of the standard insurance plans where annual premiums are paid for a fixed term such as 10 or 20 years. After all the premiums are paid, the nominee of the policy is guaranteed a sum of money after the death of the insured person.
General Insurance and It’s WorkingGeneral insurance is a general term used for all the insurance plans that safeguard things other than life, such as your health and valuables against theft, natural disasters, accidents, etc. Timely premiums are to be paid for the value of protection chosen by you. The insurance company is then liable to pay you the assured sum if any damage or theft happens to the insured entity.
Differences Between Life Insurance and General Insurance
- Benefits of maturity: Life insurance can be seen as an investment apart from insurance as it offers maturity benefits after specific tenures. General insurance, mostly, doesn’t give any maturity benefits but just promises a payout amount in case of any loss due to unavoidable circumstances.
- Premium payments: In case of life insurance, generally a fixed amount is to be paid annually, for a specific tenure like 10 or 20 years. For general insurance, mostly the entire premium is paid in one go when you are buying the policy.
- Policy Duration: The duration of life insurance policy is generally long-term, whereas that of general insurance is short term.
- Role in planning finances: Life insurance can be an investment avenue for different financial goals such as money for a child’s education, retirement corpus, etc. General insurance just protects your valuables against any crisis.
- Claim of Insurance Amount: In case of life insurance, the assured sum is paid either on the death of the insured person or maturity of the policy. For general insurance, the loss is compensated in case of unfortunate events, as per the policy terms and conditions.
Play Safe, Get InsuredBoth, life insurance and general insurance have different applicability and benefits. Life insurance helps you to protect your loved ones in your absence, whereas general insurance protects your assets. A plan with required benefits, offered by high-rated companies, can help you manage your liabilities and be secured.
Learn more about online life insurance plans
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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