Life insurance
Insurance provides a vital service for individuals. If an insured dies prematurely, his
dependents can obtain the compensation from life insurance. Life insurance covers
the risks associated with the life of an individual. Life insurance is also termed as
life assurance.
Accidents, health issues, surgeries undergone by individuals and hospital charges
etc. can also be included as additional covers into the life insurance contract.
Importance of life insurance
# Can be used as a method of saving or investment.
# If the insured survives until the policy matures the insured can obtain the
insured value and other benefits.
# If the insured dies prematurely, the named dependents can obtain the
compensation.
# Can obtain financial assistance in case of marriages and education of children.
# Can be used as a collateral when obtaining loans from financial institutions.
Property insurance
Property insurance is the insurance obtained to cover damages that might occur to
property such as buildings, machineries, vehicles and inventories.
Insurance companies issue various types of insurance policies under this insurance.
Example :-
Fire insurance, Motor insurance, Marine insurance, Insurance for
natural disasters
Importance of property insurance
# Cover financial losses arising in an
organization from the various risks.
Example :- Threat of fire, burglary,
occupational hazards.
# Facilitate in conducting business operations continuously
Since the insurance pay compensation for the massive damages faced by
businessmen, it facilitates a business to be reinstated to the previous state and
continue the operations.
# Supports both in domestic and foreign trade activities.
Example :-
Marine insurance, Goods in transit insurance, Export credit insurance,
Cash in transit insurance.
Differences between life insurance and property insurance. The following table provides several differences between these two insurances. Click it to enlarge.
