Everyone wants safety and security in all financial, personal, health, and well-being aspects. People take up various plans to secure their health and life through different types of insurance. Insurance is a policy that offers reimbursement to the policyholder in case of any mishap or loss of life.
Insurance is pivotal to securing your life. Most of you must know about life insurance and general insurance. There are also subcategories of these plans. Do you know the difference between life insurance and general insurance? How do these benefit you and your loved ones?
If you pick the right insurance now, you reap higher profits later. This blog has detailed information about the type and fundamental difference between life insurance and general insurance.
What is Life Insurance?
Do you know what is life insurance? Life insurance provides a shield for your life. Life insurance offers financial stability and relief in difficult times for your family (to the nominees, including children, spouse, or any other).
What are the Types of Life Insurance?
Here are the types of life insurance that you can choose from:
- Term Life Insurance
This plan offers protection for a fixed period. Meanwhile, if the policyholder dies, the nominee can claim the amount from the insurance company.
- Whole Life Insurance
Whole life insurance is not fixed for a particular duration; instead, it offers lifetime coverage to the policyholder. The beneficiaries can claim the value only after the policyholder’s death.
- Critical Illness Plan
Under this plan, you get coverage for life-threatening diseases like cancer, covering the expenses of diagnosis and hospitalization. Suppose a particular percentage of the sum assured remains after this cost. In case you can avail yourself of that amount upon the maturity of that policy.
- Endowment Plan
In the case of an endowment plan, the said nominee gets the benefit of claiming life cover with the amount if the policyholder dies before the term plan matures.
- Money Back Plan
In the money-back plan term insurance, beneficiaries don’t have to wait till the policy matures and the sum is returned after the fixed intervals of 5 or 10 years.
We have listed the details about what is life insurance. Now, let’s dive deep into knowing about general insurance.
What is General Insurance?
General insurance is a plan under which the policyholder gets protection from fire, theft, burglary, or any other unfortunate accident.
What are the Types of General Insurance?
Here are the different types of general insurance listed:
- Health Insurance
This insurance offers financial stability during medical emergencies and hospitalization. Depending on your ailments, you can choose specific coverage.
- Home & Motor Insurance
This insurance offers coverage for your home and vehicles if there are natural calamities, including earthquakes, riots, floods, and theft.
- Travel Insurance
Under this insurance plan, one gets security coverage in case of baggage loss, flight delays and cancellations during a trip.
Key Difference Between Life Insurance and General Insurance
Since you are now acquainted with the terms and types of life insurance and general insurance, let us unveil the difference between life insurance and general insurance. Have a look below:
- Premium Payment
If you ensure your life with a life insurance policy, its premium is paid monthly, quarterly, or yearly at regular intervals. On the contrary, you must pay the general insurance premium immediately, irrespective of whether the policy was purchased recently or renewed.
- Contract Term
This is the prime difference between life insurance and general insurance. The former is a long-term plan; if you buy this plan, you pay the segmented amount or a lump sum, which can go up to 15-20 years. However, some policy companies also offer term insurance plans for up to 40 years.
General insurance plans are short-term plans fixed for one year and renewed yearly at your convenience.
- Insurance Claim
When you get a life insurance plan, insured funds are reimbursed on account of the nominee upon the policyholder’s death. Also, when the plan is matured, policyholders get their return.
If the policyholder undergoes a critical medical diagnosis, they can leverage the health condition benefits enfolded in that plan. On the other hand, policyholders get their claims when it’s the case of a severe emergency or any loss to a vehicle or house during travel.
- Cover Plan
Life insurance is entitled to cover your life and offers fixed health benefits in case of critical illness, such as heart disease, cancer, or any other serious ailments.
General insurance offers monetary benefits in case of damage to houses, vehicles, or severe health ailments during travel. Now you know the difference between life insurance and general insurance, get the benefits now.
- Policy Value
Policyholders can get the policy value of life insurance plans based on their preferences for paying premiums.
In the case of general insurance, policy value is majorly influenced by the value of your assets. You can ascertain your policy value based on the difference between life and general insurance.
At whatever stage you are, insurance is the best protection in today’s world. To sum it up, both life insurance and general insurance bring their own set of benefits to the table. You can choose the best for you based on the difference between life insurance and general insurance. You can secure your future financially without compromising your and your family’s life.