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.
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