State the difference between Life Insurance and General Insurance.

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Solution

Basis	Life Insurance	General Insurance
1. Nature of Risk	• The risk ceovered here is death of the insured person.	• General Insurance Risk is uncertain.
2. Type of contract	• Contract of guarantee.	• Contract of indemnity.
3. Time Period	• Longer period ranging from 5yrs to 25yrs.	• Period of one year
4. Insurable interest	• Exist at the time the policy is taken.	• When contract is made and at the time of loss.
5. Medical Examination	• Required for the person whose life is being insured.	• Not required.
6. Right to Surrender	• Can surrender before its maturity.	• Cannot surrender the policy.
7. Surrender value	• Provides for surrender value.	• Doesn't provide for surrender value.
8. Double Insurance	• Multiple benefits are allowed.	• Double insurance is not allowed.