Distinguish Between – Life Insurance and Fire Insurance

Distinguish  Between

Life Insurance and Fire Insurance

HSC Board – Organization of Commerce and Management – Notes,  & Distinguish Between, difference between Life Insurance and Fire Insurance , study notes, studies material, studies notes – according to the New Textbook.

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Basis DifferenceLife InsuranceFire Insurance
1.MeaningA contract whereby the insurance company undertakes to pay a certain sum of money either on death or maturityA contract which insurer promises to pay compensation to insured if something happens to the subject matter due to fire or related events.
2.Subject matterIn life Insurance, the life of the Insured is a subject matter.In fire Insurance, the goods and assets or property of the insured is the subject matter.
3.Insurable interestIt must exist (live) at the time of contract.It must exist both at the time of contract and also at the time of loss.
4.Who takes itIt can be taken by an individual for his own life or for his family members.It can be taken by exporters, importers and shipping companies.
5.PeriodThe policy can be issued for any number of years, even until death of the assured.It is generally for a short period like one year.
6.compensationIt is paid either on death or maturity whichever is earlier.It is paid only if there is loss due to fire during the term policy.
7.Principle of IndemnityIt is not applicable as a human life cannot be valued in terms of money for calculating the actual loss.It is applicable as insurance company compensates for the financial loss and the insured is bought back to the same financial condition that he was before the event
8.Number of policiesInsured can take any number of policies on the same life.only one policy can be taken. However, double insurance is possible
9.Surrendering of policyThe policy can be surrendered before the expiry of the term subject to certain conditions.It cannot be surrendered
10.BeneficiaryThe beneficiary can be insured {if she/he survives the selected term} or else the nominee or the legal heir on the death of assured

The beneficiary is the inusred who has insured the property or good

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