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Difference between life insurance and general insurance

Life insurance only protects the life of the buyer, while general insurance is responsible for any loss of insured property such as house, car…

Insurance is a means of protecting customers from financial loss. It is provided by the insurance company, possibly through a variety of distribution channels. There are many types of insurance being offered in the market, typically life insurance and general insurance. Many people still do not understand the characteristics of these two types of insurance.

General insurance is responsible for all insured property losses such as houses, cars... Photo: Max Life

General insurance is responsible for any loss of insured property such as house, car… Photo: Max Life

Regarding life insurance, this agreement is made between the insurer and the insured, providing financial support in the event of the death of the policyholder before the term has expired. The beneficiary in the contract will be entitled to the compensation. This insurance is usually purchased to support the family of the deceased in the event of their sudden death.

Unlike life insurance, general insurance is an agreement for a specific property. In insured events, the supplier company will pay the cost of loss, damage related to the insured property of the buyer. Types of general insurance include car insurance, home insurance, travel insurance, health insurance…

General insurance works on the principle of indemnification in the event of loss or damage. On the other hand, life insurance is seen as a type of investment to protect the customer’s family, the compensation is paid at maturity or in the event of the death of the insured.

Life insurance premiums are always fixed, based on the policyholder’s coverage amount. In contrast, the premiums of general insurance policies vary depending on the condition, value, and depreciation of the property. Life insurance policies are long-term but general coverage can be short-term arrangements and are renewed at the discretion of the policyholder.

In the case of buying general insurance, the buyer is the beneficiary, while in the case of life insurance, the claim’s benefits belong to a family member designated by the policyholder.

In addition, in general insurance, the sum insured is returned to the buyer when property is damaged, while in life insurance, the amount the company is likely to have to pay for a claim is called is the sum insured. The sum insured in life insurance is paid out in full while the sum insured in general depends on the extent of the damage.

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