Insurance can be widely segregated in three categories–life, health and general. General Insurance is also referred to as non-life Insurance. Such plans are designed to help you safeguard yourself and the things around, which are most valued. These may include your home, car and other valuables like money lending, professional casualties other than death, etc. Some of these valuables may carry a lot of financial risks. Therefore, General Insurance Plans provide financial protection from the impact of fire, storm, flood, earthquake, car accidents, theft and other travel accidents. It also covers the expenses spent on any legal actions. 

The tenure for general insurance is unlike the tenure in life insurance. Mostly these are yearly contracts. The premium and cover of general insurance depend upon the type and extent of insurance.

Difference Between Life Insurance and General Insurance

  1. Meaning and Coverage

Life insurance covers your life and also has provisions to provide a savings and investment avenue. Savings here mean the benefit on maturity. For example, if the policyholder outlives the policy period, he or she can get back the premium paid over the years. General insurance is a contract of indemnity covering non-life assets. It is a promise to make good on your losses, but with no savings or investment avenue i.e. if the claim is not made, no part of the premium can be got back.

  1. Purpose

Life insurance gives a payout in case the policyholder dies, whereas in case of general insurance, payouts are made in the event of an unexpected loss such as an accident or a theft or a sudden liability.

  1. Term of contract and payment

Life insurance is a long-term contract and requires you to pay the premiums in monthly instalments. General insurance meanwhile is a short-term contract, to be renewed every year, and requires you to pay the entire premium on renewal.

  1. Insurable interest

With life insurance, the policyholder must be present during the issuing of a life insurance policy. With general insurance, however, the policyholder must be present during the time of contract and at the time of loss.

  1. Payment of claim

In the case of life insurance, the insurable amount is paid on the occurrence of the event or on the maturity of the policy. For general insurance, losses are reimbursed when the uncertain event occurs.

  1. Policy value

Life insurance can be done for any value based on the premium the policyholder is willing to pay. In the case of general insurance, the amount payable is restricted to the liability incurred or actual loss suffered, irrespective of the policy amount.

Types of General Insurance

  1. Motor Insurance - As per the Motor Vehicles Act, 1988, all vehicles running on the Indian roads are required to be insured mandatorily. Motor insurance companies allow you to choose the type of coverage you want to opt for. There are two types of motor insurance - Third Party Liability Cover and Comprehensive Motor Insurance Policy. Insurance for the damage or theft of your motor vehicle, two-wheeler, three-wheeler or four-wheeler, is covered under this type of insurance. The damage caused to the vehicle can be caused by natural or man-made circumstances, the extent of which would change from policy to policy. 

  2. Home insurance - Buying home insurance is of utmost importance as it offers protection to the entire structure of your house and ensures utmost security for all the belongings. There are certain home insurance policies that offer coverage until 5 years. You would have to pay a premium based on the value of the belongings in your home. Home and household insurance protect your home and the items inside it. A home insurance policy would also cover natural and man-made circumstances. The contents that are covered under a home insurance policy would depend on the type of policy you buy.

  3. Health insurance – This is an essential risk-mitigating tool as it prevents out-of-pocket expenses while dealing with a medical emergency. A general health insurance plan is an indemnity plan that pays for hospitalisation expenses up to the sum insured. While you can avail a standalone health policy, family floater plans provide coverage to all the members of your family. Health Insurance is a type of insurance that covers the insured's medical and surgical expenses. Depending on the policy terms and conditions, the insurer either pays the insured in the form of reimbursement or offers a cashless facility at the listed network hospital of the Insurance Company.

  4. Travel insurance - Travel insurance would help you tackle all the travel and medical contingencies while you travel abroad. It is utmost important to add travel insurance to your checklist while you plan your vacation, be it for leisure or business. Travel insurance is gaining back all its lost significance. It also offers coverage for expenses to take the insured's mortals back to the home country and many more.

Claims Process in General Insurance

  1. Health Insurance Claims Process - There are mainly two ways to make a claim under a Health Insurance Policy. You can choose a cashless basis or reimbursement basis. To make a claim on a cashless basis, the treatment must be done only at a network hospital of the insurance company servicing your policy. For availing the treatment, you would have to first seek an authorization as per the procedures laid down and in the prescribed form. In the case of claims on a reimbursement basis, the insurance company has to be informed as per their prescribed procedures. The policyholder has to ensure that documents such as claim form, discharge summary, prescriptions and bills to be submitted for reimbursement claim are obtained after hospitalization.

  2. Travel Insurance Claim Process – For travel insurance, the insured must register the claim within 24 hours of claim occurrence either by contacting the insurance company via calling the toll-free number or through email. Claim intimation should be done by filling the claim form properly with correct information with the necessary set of documents. 

  3. Motor Insurance Claim Process – You will need to call the insurance provider’s toll-free helpline number to make a motor insurance claim. You will have to make an appointment with the surveyor and take your vehicle to any of the authorized network garages for repair, for cashless service. Submit the required documents to the surveyor. The insurance company will confirm the liability. If possible, opt for a cashless facility, the company will settle the repair bills directly with the garage up to the amount payable. But in case you do not opt for a cashless facility, you have to pay for the repair charges and then submit the bills with a claim form to the surveyor/company for settlement. 


  1. Why should one opt for general insurance?

One of the main reasons one should insure is to protect one’s belongings and assets against financial loss. When one has earned and accumulated property, protecting it is prudent. The law also requires us to be insured against some liabilities. 

  1. Who should buy general insurance?

Anyone who owns an asset can buy insurance to protect it against losses due to fire or theft and so on. Each one of us can insure our and our dependents’ health and well being through hospitalisation and personal accident policies. To buy a policy the person should be the one who will bear financial losses if they occur. This is called insurable interest.

  1. What kinds of policies does the general insurance cover?

Most general insurance policies are annual – that is, they last for one year. Some policies are given for longer periods – like fire insurance for residences – and some for shorter periods – like an insurance for goods transportation or for emergency medical treatment during foreign travel.

  1. How much should I insure for?

The amount you insure for is called the sum assured. Normally a policy should cover the value of the asset – either the market value while insuring, or the cost of replacing the asset should it be lost or destroyed. The premium will depend on the sum assured.

  1. What is the periodicity of premium payments under general insurance?

Most general insurance policies are annual and the premium payment is in advance. No risk commences unless you have paid the premium. In some long-term policies, companies have the facility of collecting premiums periodically.

End Note

General insurance helps us protect ourselves and the things we value, such as our homes, our cars and our valuables, from the financial impact of risks, big and small – from fire, flood, storm and earthquake, to theft, car accidents, travel mishaps – and even from the costs of legal action against us. Under general insurance, we can choose the types of risks we wish to cover by choosing the right kind of policy with the features we need.