What are the differences between life assurance and general insurance?

List the differences between life assurance and general insurance.

(i) The insured risk is bound to happen for life assurance whereas for general insurance, the event insured against may or may not happen.

(ii) Life assurance appreciates in value while general insurance does not appreciate in value.

(iii) Life assurance may be used as security for a loan while general insurance cannot be used as security for a loan.

(iv) In life assurance, principles of indemnity, subrogation and contribution do not apply while for general insurance, principles of indemnity, subrogation and contribution apply.

(v) For life assurance, no limit to amount of cover while for general insurance, value of property determines amount of cover.

(vi) Life assurance has surrender value while general insurance does not have surrender value.

(vii) For life assurance, one can insure life with different companies while for general insurance, one is legally required to insure with only one insurance company.

(viii) Life assurance is long term/ no renewal while general insurance is a short term contract/ requires renewal.

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maurice.mutuku answered the question on August 15, 2017 at 06:21

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