Insurance is a contract that is designed to protect the interest of policyholders or beneficiaries in the face of the various uncertainties of life. There are two broad categories of insurance contracts in India– life insurance and general insurance. Unfortunately, there is some confusion regarding the differences between life insurance vs. general insurance in India.
In the following sections we will discuss the key differences between life insurance and general insurance along with the key features of these common types of insurance in India.
What is Life Insurance?
A life insurance policy is a life cover to put it simply. It is a contract that bounds the insurance provider to offer financial compensation to the beneficiary in case of the unfortunate events covered under the policy, like the insured’s untimely demise. In exchange, the policyholder pays a predetermined amount as regular premiums or single premium.
The life insurance policy covers a certain period, and if the policyholder survives it, they are eligible for a maturity benefit, as per the terms of the contract. People opt for life insurance policies to provide financial protection in case of unprecedented circumstances.
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