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Difference between Life, Marine, and Fire Insurance

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  • Last Updated : 16 Jun, 2022
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Individuals and property owners in the modern world use insurance as one of the most important safety nets. Insurance is essentially a bond that you sign with a bank or your insurance provider, in which the insurance provider promises to pay you a specific amount in the event of an emergency or if you are required to pay a large sum of money to someone. In exchange, you must pay a monthly premium to the banks, which is calculated based on your package and requirements. In this way, the respective banks earn money from all of the people who have signed up for the insurance scheme, and in exchange, they pay the amounts to those who need the insurance.

Life Insurance

People enroll in life insurance because it is the most widely used insurance scheme. In this scheme, a person insures his own life, and the insurance amount is paid to the insured person’s family in the event of a natural death or accidental death. Simply put, a life insurance policy provides financial aid to the family of a deceased person. The two major types of life insurance policies are term and permanent. Term Life Insurance is the most common type of insurance coverage and lasts for a set time period. However, Whole Life Insurance or Permanent Insurance is the most popular type of permanent coverage among people and it covers the rest of the life of the insured person. 

Marine Insurance

Marine insurance is an indemnity contract in which the insurance provider covers the losses of ships, cargo, and other vehicles used to transport, acquire, or store goods between points of origin and final destination. In other words, marine insurance provides the insured with protection against any loss caused due to marine perils or other perils of the sea. There are four types of marine insurance; namely, freight insurance, hull or ship insurance, and cargo insurance. 

Fire Insurance 

Fire insurance is a type of insurance in which a person insures his property and the insurance provider pays the person an amount to cover the damages to his property in the event of a fire accident during a specified time period and up to a specified amount. Usually, the term of a fire insurance policy is one year after which the insured has to renew the insurance policy. A fire insurance claim is valid only when there is actual loss and the fire is accidental instead of intentional. 

 Difference between Life, Marine, and Fire Insurance                              

   Basis   

    Life Insurance

     Fire Insurance

Marine Insurance

Subject MatterThe subject matter under life insurance is human life. The subject matter under fire insurance is an asset or a physical property. The subject matter under marine insurance is freight, cargo, or a ship.
RiskRisk is unavoidable when it comes to life insurance. The insured amount is paid either when the policyholder reaches maturity or when he or she dies (whichever is earlier).When it comes to fire insurance, there is no guarantee of risk. It is possible that the insured property will not catch fire.Because the occurrence of an event is unpredictable, the risk may or may not arise.
Time frameLife insurance policies are usually for a longer period of time (more than 5 years).Short-term fire insurance. In most cases, it is one year.Short-term marine insurance. In most cases, it is one or a voyage period, or a mix of both.
Insurable  Interest   Insurable interest must be present when purchasing a life insurance policy. Insurable installments interest must exist both at the time of purchase and at the time of loss.In the case of marine insurance, insurable interest must exist at the time of loss.
Payment of the PremiumLife insurance is paid in installments.Fire insurance is purchased on a one-time basis.Marine insurance is based on a lump sum payment.
Indemnity AgreementIf an indemnity, life insurance is not a contract. In life insurance, the insured person receives payment on the maturity date or after the happening of a certain event.Fire Insurance is an Indemnity contract. In fire insurance, only the actual loss is covered.Marine Insurance is an indemnity contract. The market value of the ship and the cost of goods destroyed can be claimed by the insured. 
Loss Measurement       One cannot measure the loss  of a human being. Loss is measurable in the case of fire insurance. Loss is measurable in the case of marine insurance. 
 The Goal
 
The goal of a Life insurance policy is to provide a safety net and a wise investment. The goal of Fire Insurance is to provide security to the property. The goal of Marine Insurance is to protect one’s belongings. 
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