The following are the differences between life insurance and other forms insurance such as a fire marine and miscellaneous insurance. 1) Happening of event: The event insured against in life insurance is a certain event, the only uncertainty being the time when the event will occur. But in case of fire and marine insurance the events insured against may or may not take place at all or may tale place wholly or partly. Thus in life insurance , every policy will become a claim sooner or later but it is not so in other insurances.
2) Partial Loss: Life insurance is a contract to pay an absolute amount on the maturity of the policy and there is no possibility of partial losses but the other insurance are indemnity contracts where only the actual amount of loss will be payable irrespective of the assured sum. 3) Risk assessment: Risk classification is generally more simple in life insurance chan in the others forms of insurance. Here all the lives are divided into three groups: Standard sub-standard and uninsurable. But of property insurance. the classification is more complex e.g. in marine insurance. the risk may be divided according to the type of vessel. voyage, season etc. So is the case of fire and other insurance.
4) Period: In most forms of insurance the policy is taken for one years of even for a shorter period but in life contracts the insurance is taken for very long period.
5) Premium: In life insurance the premium are charged generally on level premium plan which means that the premium charged in the initial years of the policy are higher than the actual cost of insurance but in fire and marine insurance contract , the premiums are just sufficient to cover the actual cost of insurance it contains both the investments and protection elements but in the fire or marine contracts there exists the protection element only.
6) Insurable Interest: In life insurance the insured must have the insurable interest when the policy is taken. but in marine insurance he must have it when the loss aries. In life insurance the insurable interest must be present at both the times, when the policy is taken and when it becomes a claim.
7) Higher hazard: In life insurance the hazard increases from year to year. This happens in fire and marine insurances also but there the subject matter may be kept in good condition by repair or the replacement or worst parts: but in life insurance the chances of death go on increasing with increased age whatever precautions may be taken by one about one�s health. In spite of the higher hazard from year to year, the same premium rate is charged in life contracts.
8) Procedure: Medical examination is required before a life insurance is granted whereas survey is made for before a property is insured.
9) Amount: Life insurance can be taken for any amount depending upon the premium paying capacity of the insured. But in other insurances policies can be taken up to the value of the property
10) Transfer: A life police can be transferred either by assignment or by nomination. But in other insurance the financial interest can be transferred only by assignment with the prior permission of the insurer.
11) Surrender: A life policy can be surrender by the insured before its maturity. But in other insurances, it cannot be done.
12) Claim: The claim money in life insurance is an agreed amount as the insured sum which is fixed in advance by the insurer as well as the insured. Claim money in other insurances arises only in case of
loss due to risk.
0 yorum:
Yorum Gönder