Key differences between life insurance, fire insurance and marine insurance are as follows:
1. Risk
Life Insurance: Risk is certain. The insured amount is paid either on maturity period or at the death of policy holder (which is earlier).
Fire Insurance: Risk is not certain in fire insurance. The insured property may not catch fire.
Marine Insurance: Risk may or may not be arise because the happening of event is uncertain.
2. Period
Life Insurance: Life insurance policy is generally of longer period (more than 5 years).
Fire Insurance: Short period. Generally of one year.
Marine Insurance: Short period. Generally of one year.
3. Insurable Interest
Life Insurance: While taking life insurance policy, insurable interest must exist.
Fire Insurance: Insurable interest must exist at the time of taking fire insurance policy and at the time of loss also.
Marine Insurance: Insurable interest must exist at the time of loss in marine insurance.
4. Contract Of Indemnity
Life Insurance: Not a contract if indemnity. Insured person gets payment on the maturity date in life insurance.
Fire Insurance: Contract of indemnity. Only actual loss is indemnified in fire insurance.
Marine Insurance: It is not 100% contract of indemnity. 10% to 20% of the invoice value can be added on actual loss.
Life Insurance: Security and investment.
5. Premium Determination
Life Insurance: Premium is calculated according to the age and health of insured person, time of policy and mode of payment (monthly, quarterly, half yearly or yearly).
Fire Insurance: Premium is calculated on the basis of risk.
Marine Insurance: Premium is calculated on the basis of risk.
6. Premium Payment
Life Insurance: Installment basis.
Fire Insurance: Lump sum basis.
Marine Insurance: Lump sum basis.
7. Objective
Life Insurance: Security and investment.
Fire Insurance: Security of property.
Marine Insurance: Security of property.
8 Surrendered Value
Life Insurance: If holder wants to surrender the life insurance policy, he obtain surrender value.
Fire Insurance: Cannot be surrendered.
Marine Insurance: Cannot be surrendered.
