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Sunday, 26 June 2011

Difference or Distinguish between Life insurance and Fire insurance



We can distinguish between life insurance and fire insurance under the following heads :

1. NATURE OF CONTRACT :-
Life insurance : Life insurance is not the contract of indemnity.
Fire insurance : Fire insurance is a contract of indemnity.


2. DURATION PERIOD :-
Life insurance : Life insurance covers larger duration.
Fire insurance : Fire insurance duration is from 1 years to 10 years but it is renewable.


3. CREDIT FACILITY :-
Life insurance : Against the life insurance policy credit can be obtained.
Fire insurance : Against fire insurance policy credit can not be obtained.


4. TAX CONCESSION :-
Life insurance : In case of life insurance sometimes income tax concession is granted.
Fire insurance : In case of fire insurance income tax concession is not granted.


5. NATURE OF EVENT :-
Life insurance : The event of death which is considered the base in the contract of life insurance is death which is certain.
Fire insurance : In the fire insurance event fire is uncertain. It may take place or may not take place.


6. SECURITY AND INVESTMENT :-
Life insurance : Life insurance possess the element of security and investment both.
Fire insurance : Fire insurance includes the element of security only.


7. TITLE :-
Life insurance : The word Assurance is generally used along with life policy due ti its certainty.
Fire insurance : The word insurance is used along with fire due to its uncertainty.


8. INSURABLE INTEREST :-
Life insurance : Insurable interest must exist when insurance policy is taken but no need at the time of loss.
Fire insurance : Insurable interest must be present at the time of fire policy taken and at the time of loss.


9. DOCTRINE OF SUBROGATION :-
Life insurance : In the life assurance it is not applicable.
Fire insurance : In case of fire insurance it is applicable.


10. SHARE IN PROFIT :-
Life insurance : In a life insurance insured person also takes the share from profit.
Fire insurance : In case of fire insurance nothing is paid excess from insured amount.


11. TRANSFER OF LOSS :-
Life insurance : In case of loss insured person can not transfer the loss to insurance company.
Fire insurance : In case of fire insurance loss can be transferred to insurance company.


12. SURRENDER VALUE :-
Life insurance : Life insurance policy has a surrender value after three years of its existence.
Fire insurance : Fire insurance does not have any surrender value.


13. DETERMINATION OF PREMIUM :-
Life insurance : The life insurance policy premium determination is very simple and do not change
Fire insurance : Fire insurance premium rate changes according the change in risk.


14. CLAIM LIMIT :-
Life insurance : In the life assurance after maturity whole of the assured amount becomes payable.
Fire insurance : In fire insurance case only the actual value of the property destroyed by fire can be claimed.

2 comments:

Jeni Rose,  15 March 2014 04:31  

its really helpful thank you soooo much....keep going....

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