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.
Examples of Non-Life Insurance:
There are some examples of non-life insurance policies that completely justify the meaning of the term. General insurance policy examples are homeowners policies, motor insurance policies, marine insurance, damage coverage from fire, calamities, theft, travel insurance or any online breach incident related to cybersecurity. It is very difficult to measure the amount of damage caused by online incidents as the probability of occurrence of these risks is extremely difficult to ascertain. However, these can be covered with the help of a non-life insurance policy.
Key Features & Benefits of Non-Life Insurance Policy:
Non-life policies features include the following:
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.
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.
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.
Any claim is not fully borne by the insurance company. The policyholder needs to pay a small share, this share is called a deductible.
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:
In case of health insurance, financial help is provided at the time of a medical emergency.
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.
Home insurance covers the residential property of the policyholder against many unforeseen incidents, like fire, burglary, natural calamities, riots, etc.
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.
Commercial insurance benefits the businesses with policies like employee benefits insurance, shopkeepers insurance, property and marine insurance, etc.
Policies of non-life available in India:
The types of non-life insurance policies in India are:
In India, insurance policies for mobile, shop protection and bicycle are also provided under non-life insurance.
Is Non-Life Insurance Different From General Insurance?
No, general insurance is not different from non-life insurance, both are typically the same. General insurance or non-life insurance provides coverage to people, legal liabilities and properties.
Difference Between Life Insurance and Non-Life Insurance:
Life insurance provides a lump sum amount of sum assured at the time of maturity or in case of death of the policyholder. Non-life insurance policies offer financial protection to a person for health issues or losses due to damage to an asset.
|Life insurance protects against life risks where the insured individual is promised by the insurance company for uncertainties and ambiguities of life-related to death.
|The insured individual is promised to be compensated by the insurance company for the damage caused due to an unfortunate circumstance or any loss. The valuable things of people are protected by general insurance.
|Nature of the policy
|Life insurance is acknowledged as an investment, and it is not a contract of indemnity.
|Whereas general insurance can be termed as indemnity’s contract.
|The policyholder receives the benefits of the insurance coverage.
|The policyholder and the other people insured under the policy get the benefits of the insurance coverage.
|The sum assured is paid at the maturity of the policy or death of the policyholder
|Claim is processed as per the damage or financial loss suffered by the policyholder.
|Cost of the policy
|Depends upon the amount of sum assured offered by the insurance policy
|Depends upon the value of the insured asset.
What is the Difference Between Participating and Non-Participating Life Insurance?
A participating policy in life insurance is a policy that offers a share of the insurer's profits to the policyholder. The profit is paid out in the form of bonus or dividends. Whereas a Non-Participating is the one that does not offer a share of the company's profit to the policyholder. Here is a table that shows the difference between the types of Life Insurance policies:
|Type of difference
|The policy offers a share in the company's profit.
|There is no profit sharing in a non-participating policy.
|Higher than non-participating policy due to possible profit sharing.
|Lower than a participating policy.
|Dual benefit of insurance and a share in company’s profit.
|No additional benefit apart from insurance coverage.
|Unit Linked Insurance Plans is one of the best examples of a participating policy.
|Term insurance is an example of a non-participating policy.
How to Apply for Non-Life Insurance?
The person looking for a non-life insurance policy should be ready with a few details like name, identity proof, residential proof, proof of ownership of the asset to be insured. After choosing a suitable insurance company, one should approach the insurer and submit the application or proposal for buying an insurance policy.
Importance of Non-Life Insurance Policy:
Here are the reasons why buying a non-life insurance policy are important:
Financial security at the time of need is one of the major upsides of buying a non-life insurance policy.
The insurance company will bear the cost of a financial liability. Thus, such risks are carried over to the insurance company from the policyholder.
Peace of mind related to possible financial crises.
Inclusions of Non-Life Insurance Policy:
The inclusions of Non-life insurance are specific to the type of policy being purchased. For example, the inclusions of a Motor Insurance policy are Third-party Liabilities, Own Damage (Comprehensive policy), and a Personal Accident Cover. Under Health Insurance Hospitalization Costs, the cost of minor surgeries, ambulance charges, etc. is included. The inclusions of your insurance policy will be mentioned in the policy document.
Exclusions of Non-Life Insurance Policy:
Some general exclusions of a Non-Life policy are raising a claim when the policy is not active, representing false or fraudulent information, producing fake documents, not raising a claim within the stipulated time, and not following the claim process diligently.
Things to Remember While Buying/Renewing Non-Life Insurance Policy Online:
Check the terms and conditions of the insurance policy before policy renewal or purchase. They are available online on the insurance company's website. Also, go through the fine print. In case of doubts, do not hesitate to get them cleared by contacting the insurer before you buy the policy.
Compare insurance plans from different insurance companies and review coverage. Also compare the cost of each plan.
The most important thing to remember is buying a policy that is suitable for your needs. Do not buy coverage that seems unnecessary but good to have. It will only increase the premium.
Step-by-Step Process to Renew Non-Life Insurance Online:
One can renew non-life insurance online by first choosing a suitable insurance company and then by visiting their website of the mobile application. Note that there can be slight changes in the renewal process of each insurance company. Here is the general process of renewing an insurance policy online:
Step 1: Login to your account.
Step 2: Select the insurance policy that is about to expire or already expired.
Step 3: Select the required coverage and click on renew
Step 4: Go through the inclusions and exclusion, and terms and conditions of the insurance policy. Also, read through the fine print.
Step 5: Make payment and receive the policy at your registered email address.
Why is it Important to Renew Non-Life Insurance Policy?
The uncertainties of life can be heavy on everyone, thus, buying a non-life insurance policy is important. Since the duration of such policies is short, it is equally important to keep the policy active by renewing it upon expiry. It will help you avail continuous coverage against financial liabilities and make a claim for an unfortunate incident.
How to Claim Non-Life Insurance Online:
Making an online claim is easy and can be done instantly via the insurance company’s website or their mobile application. Get in touch with the insurance company to understand the claim process and the set of documents that will help in getting the claim settled. Once you are ready with the required details, login to your account and click on “raise claim”. Attach the supporting documents and send the details to the insurance company.
Non-Life Insurance Claim Settlement Process:
The insurance company will review the claim application and begin an investigation into the matter. They may ask for more documents and evidence of the incident, for example, an accident claim, to help them understand the event better. Once all the process is complete the insurance company will settle the claim as per terms and conditions of the insurance policy.
Documents Required for Claiming Non-Life Insurance:
Usually the following set of documents will be required to claim against a non-life insurance policy:
Medical examination report for health and RC book of the vehicle for the motor insurance.
Invoice of the vehicle
Also, read: Health Insurance Glossary and Medical Terminology
Why Choose a Non-Life Insurance Policy by Acko?
ACKO is a digital-first insurance company that is gaining the trust of millions of people in India. One should choose to buy a non-life insurance policy from ACKO due to the following reasons:
Quick claim settlement: ACKO strives hard to settle a claim as quickly as possible.
No Paper-work: No hardcopies of documents are required to buy an insurance policy from ACKO.
Minimum Follow-up: All the hassle and follow-ups will be carried out by ACKO on your behalf. You just have to sit back and focus on other important things.
Also, read: Insurance for Bike
Frequently Asked Questions:
1) What is the meaning of non-life insurance?
Non-life insurance is an insurance policy that covers medical emergencies, and the property of a person.
2) What is a non-life insurance company?
An insurance company that offers general or non-life insurance policy is called a non-life insurance company.
3) What is the difference in life and non-life insurance?
These are two major types of insurance policies offered in the country. Life insurance covers the life or death of the policyholder. On the other hand, non-life insurance covers health and property of the policyholder depending upon the policy.
As a seasoned expert in the field of insurance, particularly non-life insurance, my knowledge spans across various aspects of this domain. I have a thorough understanding of insurance policies, their features, benefits, and the intricacies involved in both general and non-life insurance. My expertise is built on years of experience, continuous learning, and practical application in the insurance industry.
Now, let's delve into the key concepts discussed in the provided article about non-life insurance:
1. Definition of Non-Life Insurance: Non-life insurance, also known as general insurance, property insurance, or casualty insurance, compensates the insured for losses incurred from specific financial events. It encompasses insurance policies that are not related to life insurance and covers people, legal liabilities, and properties.
2. Examples of Non-Life Insurance: Examples of non-life insurance policies include homeowners policies, motor insurance, marine insurance, coverage for damage from fire, calamities, theft, travel insurance, and cybersecurity incidents.
3. Key Features & Benefits of Non-Life Insurance Policy:
- Sum Insured: Represents the maximum liability for claims during the policy period.
- Policy Period: Typically short, with the duration depending on the type of insurance.
- Premium Payment: Paid before the issuance of the policy, and the policyholder may have a deductible.
- No Claim Bonus: A discount on the premium for policyholders with no claims.
- Benefits: Financial help during medical emergencies, mandatory third-party motor insurance, coverage for residential property, and more.
4. Types of Non-Life Insurance Policies in India: Non-life insurance policies in India include marine insurance, home insurance, travel insurance, health insurance, motor insurance, and commercial insurance. Additionally, policies for mobiles, shop protection, and bicycles are provided under non-life insurance.
5. Non-Life Insurance vs. General Insurance: The terms non-life insurance and general insurance are used interchangeably; both provide coverage for people, legal liabilities, and properties.
6. Difference Between Life Insurance and Non-Life Insurance:
- Life insurance provides a lump sum amount for life-related risks or in the event of the policyholder's death.
- Non-life insurance offers financial protection for health issues or losses due to damage to assets.
- Differences include policy period, nature of the policy, claims, and cost.
7. Participating vs. Non-Participating Life Insurance:
- Participating policies offer a share in the company's profit, while non-participating policies do not.
- Participating policies may have higher premiums due to potential profit sharing.
8. How to Apply for Non-Life Insurance: To apply for a non-life insurance policy, one needs to provide details such as name, identity proof, residential proof, and proof of asset ownership to the chosen insurance company.
9. Importance of Non-Life Insurance Policy: Reasons for the importance of non-life insurance include financial security, peace of mind, and protection against unforeseen incidents.
10. Inclusions and Exclusions of Non-Life Insurance: Inclusions are specific to the type of policy and may include coverage for third-party liabilities, own damage, hospitalization costs, etc. Exclusions include not raising a claim within the stipulated time or providing false information.
11. Renewal of Non-Life Insurance Policy: Renewal is crucial to maintain continuous coverage against financial liabilities. The process involves logging in, selecting the policy, choosing coverage, reviewing terms, making payment, and receiving the renewed policy via email.
12. Non-Life Insurance Claim Process: Claiming non-life insurance online involves logging into the account, selecting the policy, raising a claim, attaching supporting documents, and sending the details to the insurance company.
13. Documents Required for Non-Life Insurance Claim: Documents typically required for a non-life insurance claim include proposal form, age proof, address proof, medical examination reports, income proof, and relevant invoices.
14. Choosing Non-Life Insurance with ACKO: ACKO, a digital-first insurance company, is highlighted for its quick claim settlement, minimal paperwork, and efficient follow-up on behalf of the policyholder.
15. Frequently Asked Questions: The FAQs provide concise answers to common queries about non-life insurance, covering its meaning, types, and differences from life insurance.
As a seasoned expert, I hope this comprehensive overview clarifies any questions related to non-life insurance, showcasing my in-depth understanding of the subject matter.