Difference between Property Insurance & Life Insurance

Life is unpredictable. You never know what might happen; you might be exposed to all sorts of danger at any time; therefore, it is essential to find ways to reduce the impact of potential losses if and when they do occur. This is where insurance comes in and proves quite useful. There are many different types of insurance available; the most popular types of insurance that individuals tend to invest in are property insurance and life insurance.

Property Insurance 

This is one of the most important types of insurance that many seek to invest in to cover any potential damages to their property. This type of insurance reimburses an individual or business and protects a physical property, whether that asset is a home or a vehicle, against loss from theft, fire, natural disasters, etc. 

How Property Insurance Works

The insurance company investigates an insurance claim and clarifies the cause of a particular incident and its respective damages. Accordingly, the company specifies the amount to be paid to the insured person to cover any losses.

The percentage of insurance coverage is determined according to the value of the insured asset and its contents. For example, if the asset is a house, the insurance company determines its value, and accordingly, the reimbursement amount is determined. Compensation can take many forms, including home repair, replacement housing, or monetary compensation.

The insurance company will not incur any costs in the event that the insured individual or his/her family participated in the incident.

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The percentage of insurance coverage is determined according to the value of the insured asset and its contents

Life Insurance 

Life insurance is another type of insurance where, in exchange for premium payments, an individual requests insurance for themselves. This type of insurance can be further separated into two categories:

Term Life Insurance:

The company pays the amount written in the insurance policy to the heirs or beneficiaries chosen by the insured in the event of the policy holder's death during a specified period of time.

Whole Life Insurance:

In the event of the policyholder's death before the age of 65, the insurance company pays the amount that is written in the insurance policy to the heirs or beneficiaries chosen by the insured. However, if the policyholder reaches the age of 65, the company is obligated to pay him/her the agreed-upon amount as part of his/her pension.