The basis of any insurance policy works on the simple concept of paying a premium and availing of the insurance protection. Many times, it is difficult for people to understand the difference between different insurance policies. However, there is a difference between life insurance and general insurance, which sets them apart from one another. Here is what we can learn about them.
What is Life Insurance?
Life insurance offers life cover protection to you and your family that secures the financial interests and future of your family in case of an unfortunate event. In a simple life insurance policy such as a term plan, the life cover offered protects your family in case of your untimely demise and pays out a death benefit to them so that they can sustain themselves in difficult times.
Other life insurance plans, such as savings plans, come with a savings component and a life cover. Depending on whether the policyholder outlives the policy term or does not, a maturity benefit or a death benefit will be paid out to the insured or their family.