There are some difference between life, fire and marine insurance according to the risk, time period, insurable interest, premium, mode of payment etc.
Key differences between life insurance, fire insurance and marine insurance are as follows:
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.
