Difference between Life Insurance and Marine Insurance

Difference between Life Insurance and Marine Insurance

The difference between Life insurance and Marine Insurance is related to the subject matter. In life insurance subject matter of insurance is human life. On the other side, in marine insurance subject matter is a ship, cargo.

Meaning of Life insurance:

Life insurance includes the element of protection as well as an element of investment which provides financial support to the family after the death of the insured person or at the time of old age. Sometimes people take a life insurance policy to get financial independence during their old age. In both, the cases life insurance policy is very helpful.

In this, insured pay a fixed amount in the form of premium and get the compensation at the time of maturity or death whichever comes earlier. The time period for life insurance is generally 15- 20 years.

Elements:

1.The contract between the insured and the insurer on the basis of the utmost good faith.

2.The principle of indemnity is not applicable to life insurance because we cannot estimate the loss due to the death of a person.

3. Insurable interest must be present at the time of taking the life insurance policy.

Meaning of Marine insurance:

It is an agreement between the insurer and the insured against the marine losses. Marine insurance covers: perils of sea e.g. sinking of ship, storm, seizure etc. Insured is the owner of the ship or owner of the cargo. There are some marine insurance policies which are as follows: 

Cargo insurance is related to cargo or goods in the ship and the personal belongings of the crew members.

Hull insurance covers the whole ship which includes: furniture, fitting, tools, machinery, fuel etc.

The Chart of difference between Life insurance and Marine Insurance:

Points of differences

Life Insurance Marine Insurance
Meaning

Life insurance provides financial support to the family after the death of the insured person or at the time of old age.

It is an agreement between the insurer and the insured against the marine losses. Marine insurance covers: perils of sea e.g. sinking of ship, storm, seizure etc.
Contract The contract between the insured and the insurer on the basis of the utmost good faith.

Marine insurance is a contract of indemnity.

Insurable interest Insurable interest must be present at the time of taking the life insurance policy. Insurable interest must be present at the time of taking the insurance policy as well as at the time of loss or damage of the ship or cargo.
Premium In a life insurance policy, the premium is fixed cannot be changed. In the case of marine insurance, the premium may be altered at the time of renewal of the policy.
Medical Examination Medical Examination is a must for taking the life insurance policy.

No medical examination is needed in this case.

Principle of indemnity The principle of indemnity is not applicable to life insurance because we cannot estimate the loss due to the death of a person. Marine insurance includes the principle of indemnity.
Loss  Loss is cannot be measured in life insurance

In Marine insurance, loss of ship or cargo can be measured. And cannot be more than the market value of the cargo.

Risk and Uncertainty In human life, there is an element of certainty as death or maturity of the period. So compensation is a must.

In marine insurance, there is an element of uncertainty regarding the loss at sea. So there may not be any compensation to claim.

Time period The time period for life insurance is generally 15-20 years.

Period of one insurance is basically of one year.

Conclusion:

Thus, Life insurance includes the element of protection as well as an element of investment which provides financial support to the family after the death of the insured person or at the time of old age. On the other side, Marine insurance covers: perils of sea e.g. sinking of ship, storm, seizure etc. Insured is the owner of the ship or owner of the cargo. Also, there is an element of uncertainty regarding the loss at sea. So there may not be any compensation to claim.

Thanks for reading the topic.

Please comment on your feedback whatever you want. If you have any questions, please ask us by commenting.

References: –

https://vkpublications.com/

Also, Check our Tutorial on the following subjects: 

    1. https://tutorstips.com/financial-accounting/
    2. https://tutorstips.com/advanced-financial-accounting-tutorial