What are the different types of Life Insurance and General Insurance ?
People often remain in a lot of confusion regarding General Insurance and Life Insurance. Many people do not understand the difference between them. Actually, your life is covered in life insurance, while general insurance is done to protect all things. The utilities of both are different. In simple words, know the difference between life insurance and general insurance and how many types they are.
What is life insurance?
Life insurance works to provide coverage to your life. In this, there is a contract between an individual and an insurance provider. According to this contract, if there is any kind of accident with the insured person and he dies in it, then a fixed amount is given by the insurance company as financial help to his nominee or family members. To buy a life insurance policy, a person has to pay a premium.
What is General Insurance?
All those insurances which are non-life insurance products i.e. do not come under the purview of life insurance, they are called general insurance. In this, instead of paying a premium, the insurance company guarantees compensation against any property damage, accident, disease, etc. That is, in order to protect the economic value of all the properties, general insurance is done.
How many types of lifes insurance plans are there
Life insurance plans are of many types and provide coverage accordingly.
- Term of Lifes Insurance Plan: This plan is bought for a fixed period of time. It covers the risk completely for the chosen tenure. It does not include maturity benefit.
- Unit Linked Insurance Plan: This plan includes both protection and investment. In this, the investment part is invested in bonds and shares and like mutual funds you get units. In this case, the returns are based on the ups and downs of the market.
- Endowment Plan: This type of plan includes both insurance and investment. It has risk cover for a fixed period and after the end of that period, the sum assured along with the bonus is returned to the policyholder.
- Moneyback: In this too, investment and insurance are combined for a fixed period of time. But in the insurance policy, the sum assured along with the bonus is returned in installments. The last installment is payable at the time of maturity of the policy.
- Whole Lifes Insurances Plan: This policy does not have any term i.e. you get insurance cover for the whole life. In case of death of the policyholder, the nominee gets the insurance claim.
How many types of general insurance plans
- All types of insurance that do not come under the purview of lifes insurances such as health insurance, vehicle insurance, home insurance and travel insurance etc. are all part of general insurance.
- Health Insurance: In this, coverage is available to deal with all the medical related conditions. Along with all diseases, hospitalization expenses are also covered in this.
- Vehicle Insurance: Coverage is provided in lieu of incidents like damage, accident, theft to the vehicle. It is of two types third party and comprehensive.
- Home Insurance: It is very difficult to get a house built in today’s time. In such a situation, home insurance works to provide coverage to your home and the things present in the house.
- Travel Insurance: Get travel insurance to cover losses due to lost baggage, cancellation or flight delays while traveling internationally. What are the different types of lifes insurances and general insurance? What is the difference between these? understand in simple words