Differentiate between Life Insurance and Fire Insurance on any four basis?
Answers
Answer:
Life Insurance: Risk is certain. The insured amount is paid either on maturity period or at the death of policy holder (which is earlier).
Fire Insurance: Risk is not certain in fire insurance. The insured property may not catch fire.
2. Period
Life Insurance: Life insurance policy is generally of longer period (more than 5 years).
Fire Insurance: Short period. Generally of one year.
3. Insurable Interest
Life Insurance: While taking life insurance policy, insurable interest must exist.
Fire Insurance: Insurable interest must exist at the time of taking fire insurance policy and at the time of loss also.
4. Contract Of Indemnity
Life Insurance: Not a contract if indemnity. Insured person gets payment on the maturity date in life insurance.
Fire Insurance: Contract of indemnity. Only actual loss is indemnified in fire insurance.
Explanation:
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