Life Insurance: The reason for life insurance is to afford the relatives and beneficiaries of a departed person with some financial aid and help.
Fire Insurance: Here the insurance company will pay to the policyholder any loss caused to him or his meticulous property when destroyed by a fire accident.
Marine insurance: Marine insurance covers any damage a ship or the cargo of the ship might undergo during the voyage or at any point between the start and end of the journey.
Difference between Life, Fire and Marine Insurance
Life Insurance
- Subject Matter: Security and investment. The subject matter of insurance is human life.
- Element: Life Insurance has the elements of protection and investment or both.
- Insurable Interest: Insurable Interest must be present at the time of effecting the policy but need not be at the time whirl he claims falls clue.
- Duration: Life Insurance policy usually exceeds a year and Is taken for longer periods ranging from 5 to 30 years or whole life.
- Indemnity: Life insurance is not based on the principle of indemnity. The sum assured is paid either on the happening of a certain event or on the maturity of the policy.
- Risk: Risk is certain. The insured amount is paid either on maturity period or at the death of the policyholder (which is earlier).
- Period: Life insurance policy is generally of a longer period (more than 5 years).
- Premium Determination: Premium is calculated according to the age and health of an insured person, time of policy and mode of payment (monthly, quarterly, half yearly or yearly).
- Premium Payment: Installment basis.
- Surrendered Value: If a holder wants to surrender the life insurance policy, he obtains surrender value.
Fire Insurance
- Subject Matter: Security of property. The subject matter is any physical property or assets.
- Element: Fire insurance has only the element of protection and not the element of investment.
- Insurable Interest: Insurable Interest on the subject matter must be present both at the time of effecting policy as well as when the claim falls due.
- Duration: Fire insurance policy usually does not exceed a year.
- Indemnity: Fire insurance is a contract of indemnity. The insured can claim only the actual amount of loss from the insurer. The loss due to the fire is indemnified subject to the maximum limit of the policy amount.
- Risk: Risk is not certain in fire insurance. The insured property may not catch fire.
- Period: Short period. Generally for one year.
- Premium Determination: Premium is calculated on the basis of risk.
- Premium Payment: Lump sum basis.
- Surrendered Value: Cannot be surrendered.
Marine Insurance
- Subject Matter: Security of property. The subject matter is a ship, cargo or freight.
- Element: Marine insurance has only the clement of protection.
- Insurable Interest: Insurable interest must be present at the time when the claim falls due or at the time of loss only.
- Duration: Marine insurance policy is for one or period of voyage or mixed.
- Indemnity: Marine insurance is a contract of indemnity. The insured can claim the market value of the ship and cost of goods destroyed at sea and the loss will be indemnified.
- Risk: Risk may or may not arise because the happening of an event is uncertain.
- Period: Short period. Generally for one year.
- Premium Determination: Premium is calculated on the basis of risk.
- Premium Payment: Lump sum basis.
- Surrendered Value: Cannot be surrendered.
