Insurance is One of the Foundation of Financial Planning. It Covers You, Your Dependents or Your Assets Against Financial Losses Incurred in Case of an Unfortunate Event. The Concept of Insurance is Pretty Normal. You Pay a Certain Costs Called the Premium Policy to the Insurer for Getting Coverage of a Pre-determined Costs for Any Damages Suffered. However, Depending on What Your Insurance Covers, They Are Classified as Life or General Insurance. In This Article, We Will Explain Both These Types of Insurance or Their Various a Part.
What is General Insurance?
General Insurance Covers Non-life Assets - Such as Your Home Insurance, Vehicle Insurance, Health Insurance, Travel Insurance – From Floods, Fire, Thefts, Accidents & Man-made Disasters.
Insurance Agreement That Do Not Come Under the Ambit of Life Insurance Policy Are Called General Insurance Policy. The Different Forms of General Insurance Are Fire, Marine, Motor, Accident or Other Miscellaneous Non-life Insurance Etc.
What Are Types of General Insurance?
Different Types of General Insurance Include Health Insurance, Travel Insurance, Home Insurance and Motor Insurance, Etc.
1. Health Insurance
Health Insurance Prevents Out-of-pocket Expenses While Dealing With a Hospital and Medical Emergency. A General Health Insurance Policy Plan is an Indemnity Plan That Pays for Hospitalisation Expenses Up to the Sum Insured. While You Can Avail of a Standalone Health Insurance Policy Policy and Your Family Floater Plans Provide Coverage to All the Members of Your Family.
2. Motor Insurance
Motor Insurance Policy Covers Your Vehicles Against Accidents, Damage, Theft, Vandalism, and So on. This Form of Insurance Comes in Two Forms – Comprehensive or Third-party. A Comprehensive Motor Insurance Provides a 360 Degree Cushion to Your Vehicle Against Damages Caused Due to Fire, Flood, Riot, Etc. Along With This, It Also Offers You the Rider and Add-on Benefit, The Personal Accident Coverage or Third-party Liability.
On the Other Hand, a Third-party Motor Insurance Policy Takes Care of the Damages Suffered by a Third Party in Case of an Accident Caused by Your Motor Insurance. It Won't Cover Any Damages to Your Motor. As Per the Motor Vehicles Act, 1988, It's Mandatory for Every Motor Plying on the Road to Have a Third-party Insurance Policy.
3. Home Insurance
The Home Insurance Policy Protects Your Home/ Property and Its Belongings From the Damages Suffered Due to Man-made or Natural Disasters. Some Property Insurance Policies Also Provide Coverage for Temporary Living Expenses if You Live on Rent Due to Your Home / Property Undergoing Renovation.
4. Travel Insurance
In Case You Are Travelling Overseas, a Travel Insurance Policy Protects You Against Losses Suffered Due to Loss of Luggage and Suitcases, Delays in Flight & Trip Cancellation. In Some Cases, if You Are Hospitalised While Travelling, a Travel Insurance Policy May Also Offer Cashless Hospitalisation.
Meaning and Coverage
Life Insurance Covers Your Life or Also Has Provisions to Provide a Savings & Investment Avenue. Savings Here Mean the Benefit You Receive on Maturity. For Example, if the Policy_holder Outlives the Insurance Policy Period, He or She Can Get Back the Premium Policy Paid Over the Years. General Insurance is a Agreement of Indemnity Covering Non-life Assets. It is a Promise to Make Best on Your Losses, but With No Savings and Investment Avenue, No Part of the Premium Policy Can Be Reimbursed if the Claim is Not Made.
Purpose
Life Insurance Gives a Payout in Case the Policy_holder Dies. In Compared, in Case of a General Insurance Policy, Payouts Are Made in an Unexpected Loss Such as an Accident and a Theft or a Sudden Liability.
Term of Agreement and Payment
Life Insurance is a Long-term Agreement and Requires You to Pay the Premiums Policy in Monthly Instalments. Meanwhile, General Insurance Policy is a Short-term Agreement to Be Renewed Every Year and Requires You to Pay the Entire Premium Policy Renewal.
Payment of Claim
In Case of Life Insurance, the Insurable Costs is Paid on the Event's Occurrence or on the Insurance Policy's Maturity. For General Insurance Policy, Financial Losses Are Reimbursed When an Uncertain Event Occurs.
Policy Value
Life Insurance Can Be Done for Any Value Based on the Insurance Policy Holder's Premium. In General Insurance Policy, the Amount Payable is Restricted to the Liability Incurred and Actual Loss Suffered, Irrespective of the Policy Agreement.
What is Life Insurance?
Life Insurance Covers Your Lucky Life. In Case of the Policy_holder's Premature Demise Within the Insurance Policy Term, the Insurance Company Pays the Sum Assured to the Nominee. One of the Essential Financial Instruments, Life Insurance Policy, Helps Your Family Stay Financially Independent, Square Off Liabilities Taken in the Form of Loans, Maintain the Lifestyle Provided.
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