LIFE INSURANCE DISTINGUISHED FROM OTHER TYPES OF

LIFE INSURANCE DISTINGUISHED FROM OTHER TYPES OF
INSURANCES...

The main difference between life insurance and other type of insurances are as follows:
1. Not a contract of Indemnity: Life insurance is not a contract of indemnity. In case of fire or marine insurance, the insured is entitled to claim the actual loss caused to the insured property within the insured amount. In life insurance, the indemnity principle does not apply as no upper limit can be fixed of the life of the insured.
2 Full payment of insured amount: In case of life insurance, if the insured attains the age prescribed in the life insurance contract, he would be paid the stipulated amount by the company. In case of other types of insurances, the premiums are never paid back to the insured.
Future income: Life insurance is the only form of insurance designed tocover the loss of future income as a result of death of the insured. In case of fireor marine insurances, the actual loss of the property is covered which is no caseexceeds the insured sum.
Element of Investment: The life insurance undertakes to protect theinsured's family, creditors and others who have insurabfe interest on the death of
a person. It also provides an opportunity of investment by making a period! payment (premium) to the company. The life insurance company pays th insured amount on the happening of death of the insured or to his dependants, the insured attains the specified age in the contract, the premiums and thi compound rate of interest is paid back in lump sum to the insured. Lif insurance thus combines the elements of Investment and protection. Tru fire or, marine or all other type of insurances give protection only to the insured t restore him to his original financial position in event of loss.
5. Time Element: Life insurance policy is issued for longer period of timi depending upon the age, health, and profession of the insured. The other form of insurances are issued for a short period of time. The fire insurance is renewei annually. The marine insurance is for the particular voyage etc.
6 Surrender Value: In the life insurance policy, the insured can give u the policy as and when he desires. If the policy is surrendered after a period c three years, the insurer will pay a certain percentage of the total premium to thi insured. In case of fire or marine insurance, the insured cannot give up thi insurance policy as the premium has already ben received by the insurer.
7.- Assignment of policy: A fire insurance policy can be assigned to i third party by the insured giving a due notice to the insurance company. In case a life insurance, the policy cannot be assigned to a third party without the prio approval of the insurer