A critical component of financial planning, insurance offers protection and peace of mind against various risks. In India, insurance can broadly be categorised into two types - life insurance and general insurance. Let’s look at the key differences between the two.
What is Life Insurance?
The primary objective of a life insurance policy is to offer financial support to the family members, ensuring their financial stability in the policyholder's absence. Life insurance can also serve as a tool for long-term savings and investment.
Here are some of the key features of life insurance.
Coverage:
Provides coverage for the policyholder's life.
Term:
Typically long-term, ranging from 10 years to the entire lifetime.
Payout:
Sum assured is paid to the beneficiaries upon the policyholder's death.
Types:
Includes term insurance, whole life insurance, endowment plans, and unit-linked insurance plans (ULIPs).
What is General Insurance?
General insurance provides coverage for non-life-related risks such as health, property, motor vehicles, travel, and liability. It protects against financial losses arising from unexpected events and accidents.
Here are some of the common general insurance features.
Coverage:
Provides coverage for assets and health.
Term:
Typically short-term, usually for one year, and renewable annually.
Payout:
Compensation for the financial loss incurred due to insured events.
Types:
Includes health insurance, motor insurance, property insurance, travel insurance, and liability insurance.
General Insurance Vs Life Insurance
Here are the key differences between life insurance and general insurance you should be aware of.
Feature
| Life Insurance
| General Insurance
|
| Coverage | Life of the policyholder
| Non-life assets and health |
| Purpose | Financial protection for beneficiaries | Protection against financial losses |
| Policy Term | Long-term (10+ years to lifetime)
| Short-term (usually 1 year) |
| Payout | Sum assured on death | Compensation for insured events |
| Types | Term, Whole Life, Endowment, ULIP | Health, Motor, Property, Travel, Liability |
| Tax Benefits** | Under Section 80C | Under Section 80D for health insurance |
| Premium Payment | Regular or single premium | Annual or as per policy terms and condition |
A life insurance premium calculator is a useful tool for estimating the premium you need to pay for a life insurance policy based on factors such as age, coverage amount, policy term, and health status. It helps in comparing different policies and choosing the one that suits your financial needs and goals. Similar online calculators are also available for general insurance plans.
Disclaimers:
** Tax exemptions are as per applicable tax laws from time to time.
IndiaFirst Life Insurance Company Limited, IRDAI Regn No.:143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North [C] Wing, Tower 4, Nesco IT Park, Nesco Center, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll-free No – 18002098700. Email Id:customer.first@indiafirstlife.com, Website: www.indiafirstlife.com, Fax No. +91226570600. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd. under license. Advt. Ref. No
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