The term insurance refers to a contract wherein, in exchange for the payment of a premium, the insurer agrees to provide compensation for any loss, damage, or death caused to the insured. General insurance and life insurance are the two categories of contract. Life insurance corporation of India (LIC) is an Indian state-owned insurance group and investment company that offers a variety of life insurance products and services. General insurance corporation of India (GIC) is an Indian state-owned insurance company and the largest general insurance company in India. GIC offers a range of insurance products, including fire, motor, marine, liability, and miscellaneous insurance.
Life insurance is an insurance policy that protects the policyholder against the danger of dying. General insurance, on the other hand, is a type of insurance policy that covers any risk outside a person's lifetime risk. Let us discuss some more Differences between LIC and GIC with the help of the comparison given below.
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What is LIC?
The term Life insurance refers to a form of insurance that protects against the danger of death and guarantees compensation by disbursing the stipulated amount upon the insured passing or after the defined time. In life insurance, the sum is due when an uncertain event occurs. Additionally, there are other plans in which the policy amount is paid at maturity. These are long-term contracts that call for premium payments all the way up until they mature, at which point the sum insured is paid.
What is GIC?
A contract that covers any risk save the danger of death is known as general insurance. Sometimes referred to as nonlife insurance or property and casualty insurance. The purpose of insurance is to protect ourselves and our possessions, such as our home, automobile, and outer assets from hazards like fire, theft, flood, storm, accident, and earthquake. There are indemnity contracts, in which the insurer guarantees to compensate the insured for any losses. Therefore, the insurance company will compensate the insured for their loss regardless of the policy coverage level. Since they are typically one year in length, they must be renewed annually.
Difference between LIC and GIC:
- LIC is an insurance contract, which covers the life risk of the person insured. While GIC is an insurance that is not covered under life insurance.
- LIC is a premium that has to be paid over the year. While the GIC premium has to be paid in a lump sum.
- LIC is a form of investment. while GIC is a contract of indemnity.
- LIC is a long-term contract. GIC is a short-term contract.
- LIC insurable amount is paid either on the occurrence of the event or on maturity. While GIC is loss is reimbursed, or liability will be repaid on the occurrence of an uncertain event.
- LIC must be present at the time of the contract. GIC must be present, at the time of contract and loss both.
- LIC can be done for any value based on the premium policy. While GIC is the amount payable under life insurance and is confined to the actual loss suffered.
- LIC insurance gives you the insurance of life risk while GIC does not cover life risk and includes various types of insurance like motor, home, and property insurance.
- In LIC, the insurable interest must be present at the time of the contract, but in GIC, presence is significant at both periods. Loss and contract duration.
- GIC lacks the saving component, whereas LIC does.
- In LIC, one can get the sum when some mishappening occurs or at the maturity of the term, but in GIC, one can avail of the benefit only when the uncertain event occurs.
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