Difference between Life Insurance and General Insurance

• Life Insurance is a contract which  ensures your life risk and also works as in an investment avenue. Whereas,General Insurance is a contract of indemnity which promises to make good   your losses.

• In Life Insurance, the sum assured      along with benefits is paid either on the event of death of the policy  holder or on maturity of the policy. On the contrary, in General  Insurance, the amount of actual loss or claim is reimbursed on the      happening of the certain event against which the policy has been issued.

• Life Insurance is a long term  contract, some policies even run till such time you are alive. On the  other hand General Insurance is a short term contract, generally for one  year and needs to be renewed every year on expiry.

• Since Life Insurance is a long  term contract, the premium needs to be paid throughout the term of the  policy or upto the minimum premium paying term. The premium for General Insurance is payable only in case the policy is renewed after one year.

• Through certain Life Insurance  policies you can also create wealth in the long term apart from securing your life. Contrary to this, in General Insurance, the amount payable is  confined to the losses suffered or the maximum cover amount of the policy. If there is no claim during a year, the premiums are not returned to the  policy holder; therefore, there is no savings component attached to the  General Insurance policy.

• In case of Life Insurance, the insurable interest i.e. the individual who is taking the policy must be present at the time of contract. Whereas, in case of General Insurance, the insurable interest must be present both at the time of contract and at      the time of loss.

• Even though Life and General Insurance, both are insurance contracts, both serve different purposes in our lives. While we can protect the financial future of our families and save for our future through a life insurance policy, the General Insurance protects us from an event which has financial implications and reimburses us the benefits on occurrence of the event for which the policy has been taken.

                                     Insurance is the subject matter of the solicitation.