Difference: General vs Life Insurance

In this article, we will discuss the difference between general insurance and life insurance. We will discuss on the types of general insurance and the types of life insurance. In addition, we will also discuss on who needs general insurance/life insurance and who does not need them. Insurance is essential for you to be able to focus on the important things in life since it provides financial protection for you and your family in the event of an unforeseen situation.

Find out which do you need? General insurance or life insurance?

Since it is almost impossible to live a risk-free life, insurance is there to protect you from these risks. Insurance can be divided into two categories: General and Life. General insurance protects your belongings from accident. It is also known as non-life insurance, because this insurance covers all the insurances that are not Life related.

In simple words, general insurance covers almost everything other than your life. Example of general insurances are:

• Motor insurance

• Fire insurance

• Home insurance

• Health insurance

• Travel insurance

• Accident insurance

You can choose the type of risks from which you would like to protect yourselves from by simply selecting the right policy with the features you need. General insurance policies usually provide coverage for about one year and premiums are paid on a one-time basis.

General insurance can give you protection in a variety of areas such as accident, fire, health, travel and others. If you have started working, you will be attracted to buy valuable items such as a car, house and vacations. If you do not earn much or do not have much savings, you cannot afford to lose the valuable items you have bought. This is when having general insurance will protect you. In other words, general insurance can protect you from risks that you cannot bear on your own.

Here are some examples of how general insurance can protect you and who should buy them:

Life is uncertain and any unpredictable event may occur at any moment. That is why life insurance is there to protect you and your family financially when bad events happen. Life insurance gives financial stability, aids in the repayment of debts, aids in covering living expenses, and aids in the payment of any medical or final expenditures. When you buy life insurance, you will set a fixed amount, for example RM100,000, that will be paid out to you or your family for the worst event. This is similar to car insurance were the sum insured is the value of your car. The sum insured is paid in full when your car is stolen. In life insurance, a stolen car is equal to death, where the sum insured is paid full to your family.

You normally will pay a regular monhtly amount for an agreed sum insured for your life insurance.

There are 7 types of life insurance. The table below shows the types of life insurance and their brief descriptions.

Although life insurance is a significant protection policy, not many people are aware of its importance. Individuals and families with no life insurance have no choice but to bare the high costs in case of an unfortunate event like accident, disabilities or death. According to OECD in 2019, 12 out of 100 people have life insurance in the US compared to only 5 out of 100 people having life insurance in Malaysia.

The main idea of life insurance is to provide financial assistance to you and your family in the event of an accident, disability or death. Life insurance will cover the high cost in the event of an unfortunate event that happens. If you are married and you support your family, we recommend for you to get life insurance. This is because, in the case that something unfortunate like an accident, disability or death happens to you, you and your family will receive financial aid.

Here is how life insurance can protect you and your family:

Accident:
If you have life insurance and get into an accident which causes severe injuries, the insurance company will pay you and your family the sum insured for your life insurance.

This financial aid can be used to spend on your medical treatment and buying the necessary medical equipment. In addition, it can also be used to cover for your family’s expenses (food, rent) while you are in the hospital.

Disability:
If you have life insurance and get into any disabilities due to an injury or accident, the insurance company will pay you and your family the sum insured for your life insurance.

This financial aid can be used to spend on your medical treatment, installing modifications to your home or car to accommodate your disability or hiring a full time house helper. In addition, it can also be used to cover for your family’s expenses (food, rent) while you are in the hospital.

Death:
If you have life insurance and have passed away, the insurance company will pay your family the sum insured for your life insurance.

This financial aid can be used to cover your family’s expenses when you are not around and help them get back on their feet financially.

General Insurance

Life Insurance