Understand the difference between general insurance and life insurance

Many Indians know about insurance. Sadly, they don’t always understand the insurance types available. Depending on the coverage you want, you must select between a life insurance plan or a general insurance policy. Once you can differentiate between the two, you can make informed decisions and get the required coverage. Let’s understand the two types of insurance and how they impact you.

A life insurance policy provides life coverage. In the unfortunate event that something happens to the policyholder, their beneficiary receives the sum assured payout.

Consider a scenario where you’re the only earning member in your family. Your partner stays home to look after your toddler. Your child attends nursery for a few hours every day. If something happens to you and they lose your income, they will struggle to make ends meet. When you have a life insurance plan, the payout from the policy provides financial stability. It helps them pay off any outstanding debt and gives them some breathing room to figure out the way forward.

Now that you understand the life insurance meaning, let’s look at the various kinds of plans available:

These policies provide life coverage for a specific period only. They do not offer any maturity benefits, making them pure life insurance products. Term plans provide higher sum assured amounts at low premiums, making them the most affordable way to get life coverage.

As the name suggests, these policies provide coverage for life. Since the tenure could last more than 10 or 20 years, the premiums are higher than those of term policies. They also have a savings component that helps you build a corpus over time. Often, people use variants of whole life insurance plans to prepare for retirement.

ULIPs offer life coverage and investment avenues. A part of your premium amount goes towards providing the required life coverage. The rest gets invested in funds of your choice, allowing you to grow your money for the future.

A general insurance policy covers you against losses and damages to your property and your liability for any injury or damage caused to others. They are known as non-life insurance policies. General insurance covers your vehicles, unexpected travel expenses, properties, and medical bills.

These plans cover your property against damages caused by fire, theft, and natural disasters such as floods and earthquakes. In addition, it protects you against liability if someone gets injured on your property.

A comprehensive motor insurance policy protects your vehicle against damages caused by accidents, theft, and natural disasters. It also provides liability coverage if you damage another person's property or injure someone in an accident.

Can you imagine dealing with a lost passport or your money getting stolen while in a foreign country? Travel insurance covers you against unexpected events such as trip cancellation, medical emergencies, and lost or stolen baggage.

Let’s understand how the types of insurance policies you purchase compare.

The benefits of insurance are manifold. General insurance plans help alleviate the cost of repairing your vehicle or paying high medical bills. In India, every vehicle owner must have at least third-party insurance coverage as stipulated by the Motor Vehicles Act of 1988. Purchasing a health insurance policy allows you to deal with medical emergencies without worrying about the cost of good healthcare. Further, travel policies enable you to enjoy your holidays or get through your business trips without dealing with delayed flights or other unfortunate circumstances. General insurance plans provide financial assistance while dealing with uncomfortable situations, allowing for better financial planning.

If you’re ready to take charge of your finances and protect your future, consider purchasing the required insurance today. Visit the Zuno website to browse our policies and select the ones that best meet your needs. Our intuitive website makes the purchasing and claims process super quick and easy.

ARN: Zuno/Blog/0623/05                                                                                                                              All rights reserved.