Financial emergencies can arise at the most unexpected of times. Some in your presence and some in your absence. In both scenarios, you need to be prepared to tackle it all. And the best way to do it is by investing in an insurance policy. An insurance policy is ideally a contract between the policyholder and the insurance company, where the policyholder or the beneficiary gets a monetary benefit at the end of the tenure or in case of emergencies.
Depending on your needs, you can choose from multiple types of life insurance. You can either choose life insurance or general insurance depending on your needs. Life insurance and general insurance can further be divided into multiple types. In this article, we are going to talk about the difference between life insurance and general insurance.
Life insurance
A life insurance policy is a contract between the policyholder and an insurance company where the beneficiary of the policy owner gets paid in case of the death of the policyholder. It works as the perfect financial cushion for your loved ones in case of an accident. Life insurance plans can further be divided into various subtypes. A few types of life insurance policies include Term Life Insurance, Endowment Plans, Money Back Plans, Unit Linked Insurance Plans (ULIPs), and whole life insurance plans. In short, life insurance policies are a perfect way to secure the future of your family in case of a mishap in the future.
General insurance
The need for finances is not just restricted to the time when a family member passes away. You could need some financial assistance. In such a scenario, the insurance plans which help safeguard your needs other than life are known as general insurance. General insurance can also be further divided into various subtypes. A few types include health insurance, motor insurance, home insurance, travel insurance, and so on.
Differences
Life insurance has more maturity benefits when compared to general insurance. The process of premium payments also differs. Life insurance policies are long term and general insurance policies are short-term. Life insurance policies can also be used as an investment tool for future security, whereas general insurance policies cannot. Life insurance policies offer monetary benefits at the end of the term, whereas general insurance needs to be renewed regularly.
We hope this article sheds light on the difference between life insurance and general insurance. Make sure you find the right insurance company to invest in.