In simple words there is Life Insurance and any other Insurance besides Life Insurance is called General Insurance, as the name suggests. Later on stand alone Health Insurance also came into being with concerted focus on Health Insurance plans. Following are brief notes on the major three categories of Insurance prevalent in India.
Life insurance is a contract between an insurance policy holder and an insurer where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policyholder typically pays a premium, either regularly or as one lump sum.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer.
General insurance or non-life insurance policies, including automobile, shopkeepers, commercial establishments and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that is not determined to be life insurance. It is called property and casualty insurance in the United States and Canada and non-life insurance in Continental Europe. In India it is called General Insurance. Practically General Insurance can cover insurance of any asset on Earth except Human Life.
Technically Health Insurance is part of General Insurance but in recent times it has developed into a stand-alone category. Health insurance is an insurance plan, covering medical and surgical expenses of an insured individual. Under such plans the insurance company reimburses the expenses incurred due to illness or injury or pays the hospital / Medical Institution of the insured individual directly
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