What is a Non-Life Insurance Policy?
The definition of non-life insurance is, the losses that are incurred from a specific financial event are compensated to the insured this is called non-life insurance. General insurance, property insurance and casualty insurance are other names of non-life insurance. It can be defined as any insurance that is not related to life insurance. People, legal liabilities and properties are covered under a non-life insurance policy.
Key Features & Benefits of Non-Life Insurance Policy:
Non-life policies features include the following :
1. The amount specified in the policy is the sum insured which, during the policy period, symbolizes the insurer’s maximum liability for claims. The insurer may specify the available amount of sum insured.
2. The policy period of a non-life insurance plan is usually short, i.e., one year. The duration can be longer depending upon the type of insurance.
3. The premium of the policy is paid right before the insurance company issues the policy. When an application for insurance is received by the company, they assess the risk involved depending upon the type of cover required. For example, under health insurance, the age, medical history, and current medical status of a person will be taken into account before the insurance policy is issued.
4. Any claim is not fully borne by the insurance company. The policyholder needs to pay a small share, this share is called a deductible.
5. If no claims are made under a general insurance policy, then the policyholder is awarded a discount called No Claim Bonus. This is a cumulative discount on the premium of the policy that increases till it reaches a certain number.
The benefits of a non-life insurance policy are:
1. In case of health insurance, financial help is provided at the time of a medical emergency.
2. It is mandatory by law to buy a third-party motor insurance policy. It can take care of the compensation to be paid to the third party in case of damage to property or life.
3. Home insurance covers the residential property of the policyholder against many unforeseen incidents, like fire, burglary, natural calamities, riots, etc.
4. Travel insurance plans offer insurance coverage to senior citizens and children as well. These help with issues like loss of baggage, accidents, loss of documents, etc. in a foreign land.
5. Commercial insurance benefits the businesses with policies like employee benefits insurance, shopkeeper’s insurance, property and marine insurance, etc.
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