General Insurance

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Insurance protection is important for everyone. As the old saying goes: “An ounce of prevention is worth a pound of cure.” Whether you are buying a car, leasing one, or just getting a new job, insurance is essential to protect not only your property but yourself and your family as well. 

Today, life insurance, marine insurance, and fire insurance are some of the most purchased insurance policies in India. Let’s dive deeper into the difference between these plans:

Life Insurance Plans:

A life insurance policy is a legal contract between an insurance provider and a policyholder where the former guarantees to pay an amount of money to the policy beneficiaries if the person insured dies within the policy tenure in exchange for premiums paid by the latter. The amount of money paid by the insurance provider after the insured’s death is called a death benefit and the beneficiaries can use that to cover things like funeral expenses, unpaid medical bills and loss of income. 

Types of Life Insurance Plans in India

  • Term Insurance Plans:

Term life insurance offers coverage to the insured for a fixed period of 10,20, or more years according to the policy. This plan does not provide maturity benefits to the policyholder, but they are relatively cheaper than other plans.

  • Unit Linked Insurance Plans:

Unit-linked insurance plans offer both investment and insurance benefits. These policies, however, have a five-year lock-in period, making them long-term plans.

  • Endowment Plans:

Endowment insurance policies help you save money over the policy term providing you benefits of both savings and insurance. The policy pays out a maturity amount if the insured lives the policy period. 

  • Whole Life Insurance Plans:

As the name suggests, the whole life insurance plan provides coverage to the insured up to 100 years of age. These plans provide death benefits on the unfortunate death of the insured as well as maturity benefit if the insured crosses 100 years of age.

  • Group Life Insurance Plans

Mostly purchased as a component of employee benefits packages, Group Term Life Insurance plans provide coverage to a large group of people under a single master contract where the policyholder is the employer. 

  • Moneyback Policy

Moneyback policies provide a part of the assured sum amount regularly throughout the policy period.

  • Child Insurance Plans

Child insurance provides both insurance and investment benefits. The plan offers a lumpsum payout on maturity while also providing a death benefit to the plan beneficiaries. 

  • Retirement Plans

Retirement plans offer financial security to individuals facing retirement. So, when you wish to retire and start receiving income from your pension plan, you have to choose from the annuity options available. 

Benefits of Life Insurance Plans

  • Peace of Mind

Life insurance provides peace of mind to the insured that if they die in an unfortunate event, their family has a financial backup plan in place.

  • Alternative Investment Methods

Unit-linked investment plans, or ULIP, offers policyholders an alternative investment method which also provides life insurance benefits.

  1. Tax Benefits

Section 80C of the Income Tax Act provides tax benefits of up to INR 1.5 lakhs to policyholders for paying life insurance premiums. Even the maturity benefit of most insurance plans offers tax-free maturity benefit under section 10(10D), provided the sum assured is at least ten times the annualised premium paid.

Now that we know about Life Insurance let us understand what Marine Insurance is.

Marine Insurance Plans:

Marine insurance is an indemnity contract where the products are insured from the manufacturing country all the way to their destination country. It protects against the damage or loss of boats, cargo, and terminals, as well as any other mode of transportation used to convey products between places of production and destination.

Types of Marine Insurance Plans in India:

  • Freight Insurance

Freight insurance protects the vessel operator in the event of a freight loss.

  • Liability Insurance

Suppose the ship crashes with another boat and sustains any damage. If there is any outstanding liability by the ship’s operator for such an accident, liability insurance protects the same.

  • Hull Insurance

The hull insurance coverage protects the cargo vessel from loss and accidents.

  • Marine Cargo Insurance

Marine cargo insurance coverage protects the cargo, or items, being moved from one location to another.

  • Time Policy

Time policy offers coverage for a specified period.

  • Voyage Policy

The voyage policy offers coverage for a single voyage.

  • Mixed Policy

A mixed policy offers coverage for a specified period between specified destinations.

  • Port Risk Policy

Port risk policy offers coverage by a vessel while anchored at a port.

  • Valued Policy

The valued policy offers coverage against the loss of a calculated value of the consignment and cargo.

  • Unvalued Policy

The unvalued policy offers coverage against the loss of an estimated value of the consignment and cargo.

  • Floating Policy

The floating policy offers coverage for the ship up to the amount of the lump sum payment.

  • Block Policy

The block policy covers both land and maritime transit of products.

  • Composite Policy

The composite policy is underwritten by multiple underwriters, each one with fixed liability. 

  • Fleet Policy

A fleet policy protects the policyholder’s fleet of vessels.

Benefits of Marine Insurance:

  • Peace of Mind

As a maritime company manager, you are most certainly familiar with the everyday challenges and fast-paced characteristics of the industry. Accidents may occur at any given time. And you do not want to be taken by surprise at that time. With a correctly planned marine insurance policy, you can concentrate on getting the job done rather than worrying about how you’ll compensate for the losses caused by a serious crash.

  • Liability Coverage

If you are judged to be at blame for an incident that includes another boat or individual, you will need liability insurance coverage to pay for the losses and legal fees. Given how costly boat mishaps could be, it is a significant feature of insurance coverage and a substantial advantage of owning a well-designed comprehensive marine insurance policy suited to your needs.

Finally, let us understand Fire Insurance.

Fire Insurance

Fire insurance is a type of property insurance plan that covers fire-related losses and damages. Most plans include some type of fire protection. However, residents may purchase additional protection for their property in case it is damaged or destroyed by fire.

Types of Fire Insurance Plans in India:

  • Valued Policy

A valued policy offers coverage when an agreement is drafted, and the insurer agrees to compensate in the case of property loss by fire.

  • Specific Policy

The specific fire policy offers coverage against property destruction by a fire up to a specified amount.

  • Average Policy

In average policy, the insurer shall bear just the fraction of the real loss that the sum guaranteed relates to the actual worth of the total property at the moment of loss.

  • Floating policy

The floating policy covers a variety of commodities situated in numerous areas for a single sum insured and a single premium.

  • Blanket Policy

The blanket policy covers all assets under a single policy, both fixed and current assets.

  • Comprehensive Policy

Comprehensive policy covers hazards such as fire, floods, riots, protests, and theft up to a particular sum.

  • Consequential Loss Policy

A consequential loss policy indemnifies the insured for any loss or profit resulting from a business disruption caused by a fire.

  • Reinstatement Policy

Reinstatement policy covers the amount necessary to reinstate property or assets destroyed due to fire.

  • Open Declaration Policy

The open declaration policy offers coverage up to the amount declared by the insurer during the time of deposit by the insured.

Benefits of Fire Insurance:

  • Peace of Mind

Though fire insurance is something you might want to skip, it’s an important thing to have. Otherwise, you could be putting your home and belongings at risk. Fire insurance is a great way to protect your home from fire and keep you from being devastated if the unthinkable happens.

  • Rebuild the Damage

Fires may destroy structures and cause irreparable damage to the structure of your house or company. This coverage protects you so that you can repair or replace damaged portions. Make certain that your garage, home, and company locations are all covered.

  • Temporary Accommodation

Purchasing fire insurance will financially safeguard you from the losses of your assets, house, and company. It will also include temporary housing, which will assist funds for the insured individual to move out as well as live someplace else during the time it needs to rebuild the building before it can return.

To sum off, here are the differences between Life, Marine, and Fire Insurance policies:

Base Life Insurance Policies Marine Insurance Policies Fire Insurance Policies
Coverage subject Human life is subjected to policy coverage. Freight, cargo and ships are subjected to the policy coverage. Physical property or assets are subjected to the policy coverage.
Pay-out risk Unavoidable risk. The pay-out will be offered paid when the insured dies or the policy matures. Risk is not guaranteed. The payout will be offered if any unfortunate event occurs. Risk is not guaranteed. The payout will be offered if any unfortunate event occurs.
Policy Tenure Life insurance plans are generally long-term plans Marine insurance plans are generally for a single voyage, a year or both. Fire insurance plans are generally for a shorter period, like a year.
Contract type Life insurance is not an indemnity insurance product. Marine insurance is an indemnity insurance product. Fire insurance is an indemnity insurance product.
Coverage objective The life insurance policy offers a financial safety net in case of the insured unfortunate death. The marine insurance policy offers protection to the ships and their cargo during a voyage. The fire insurance policy offers protection to the policyholder’s assets against fire for a particular period.

Conclusion

In line with the above-discussed points, you can make a comprehensive comparison between the above-mentioned three policies. Go through various brand offers and select the one which is most suitable for your requirements. Make sure to have a detailed personal assessment with an insurance adviser before proceeding further.

Frequently Asked Questions

  • Which policy should I purchase?

Your needs determine the sort of insurance you should purchase. Life insurance is the route to go if you are concerned about your life and need to offer financial support to your nominees. Marine insurance is required for maritime company managers, and if you are a business owner or are generally concerned about fire outbreaks, you should get fire insurance.

  • Which is the best insurance policy?

There is no such thing as the “best” insurance coverage. Your needs and budget determine your perfect insurance plan.

  • How to purchase insurance plans?

To acquire insurance plans, you must first visit your insurance provider and apply for the insurance plan via the proper application methods.