Marine insurance and Life insurance has very different characteristics from each other. One is done and paid to insure a human life whereas the other one is to protect any goods or cargo.
Marine Insurance vs Life Insurance
The main difference between Marine insurance and Life insurance is that marine insurance is a policy that will protect mostly cargo, ship, and transport-related machinery. Also, the premium is done on lump-sum basis in marine insurance, whereas in the case of life insurance premium is collected on an installment basis.
The area that marine insurance covers are extensive and come with various types of insurance policies according to the needs. It mostly insures any machinery related to a ship, cargo that are transporting, freight insurance and many other.
The definition of life insurance is pretty straightforward. You will pay a certain amount of premium to the company to insure an individual or family. It is a contract between the policyholder and the insurer covering a plan.
Life insurance comes with two types of policies mainly as it does not cover a wider area like marine insurance. Though, there are a different set of plans that you may choose from to invest for the future.
Comparison Table Between Marine Insurance and Life Insurance (in Tabular Form)
| Parameter of Comparison | Marine insurance | Life insurance |
|---|---|---|
| Risk | The risk of marine insurance is uncertain. It may or may not arise in the insured timeline. | In the case of life insurance, the risk is absolute because death is inevitable. The company needs to pay the full amount either on maturity period or at the death of the policyholder. |
| Time period | The duration of marine insurance is usually shorter. The maximum time available for marine insurance is one year. | Life insurance is done for a longer duration. A life insurance policy period varies from 10 to 30 years. |
| Nature | Marine insurance provides you with a contract of security or protection of the goods/cargo. | Life insurance does not provide you with a contract of indemnity. They will offer you the amount after the death of the policyholder. |
| Premium | The premium rate is different for marine insurance, and also it could change depending on the risk. | Life insurance premium calculation is very easy. It is done according to the policyholders age, health, the plan they are choosing, and it does not change. |
| Surrender | Once you’ve done the marine insurance, you cannot surrender the insurance. | In life insurance, the policyholder can surrender the insurance and get a surrender value as well. |
What is Marine Insurance?
It is an insurance that is designed to cover all the risks and unforeseen accidents when it comes to ships and cargo. There are different types of insurance policies available, depending on the needs and the type of business.
As the name suggests, it is generally used for Sea transport purposes and provides security against any natural disaster, damage of ship, loss of goods, etc.
Different types of Marine insurance can be described as –
- The first one that comes under this marine insurance is Hull & Machinery insurance. It covers the vessel’s crucial parts and all the other necessary machinery that are onboard. In any unforeseen event, if they get damaged, claims can be made.
- The most important aspect of marine insurance is cargo insurance. It protects the cargo against any losses. If it gets damaged in any way, the cargo owner gets paid for the damage.
- There are more policies such as – Time policy, which will be valid for a specific time. Voyage policy, which will insure a particular voyage. Valued policy, in which case the value of cargo and ship will be calculated and then the premium plan is selected.
- You can also choose liability insurance and claim for it in case of the ship crashing or any other incidents as well.
Marine insurance has always included complex methods, straightforward dealings. It offers a wide area of coverage through different policy plans. For merchant traders, or business persons related to import/export will be beneficial in the long run to have marine insurance.
What is Life Insurance?
Life insurance can be described as a way to be prepared financially after the policyholder’s death. No one knows what life has stored for them. In exchange for a little premium, you will get a certainty financially.
One of the most advantages of life insurance is that it saves you from income tax. You could build a lump sum capital for when you are old, get a better retirement plan, maybe clear off any pending loans, etc.
Having a life insurance policy may not seem like everything, but it would help you sleep better at night thinking your loved ones won’t have any harmful impact financially. It takes a very less amount of premium to take care of your family financially in the even of the earning person’s death.
- The premium of life insurance is calculated on the age, the health of the person and the insured policy amount.
- You may need to perform some medical tests in some cases.
- There are two types of life insurance, the first one is known as term insurance that can last from 1 to 30 years. When the policy expires, you will get the matured amount.
- The second one is known as permanent life insurance which does not come with an expiry date. It is more expensive than term insurance and more profitable as well.
Before going for an insurance policy, make sure to know what you are aiming for. Term policies usually meet the usual requirements for the majority. Most of all, don’t leave your family members unprotected or uncertain.
Conclusion
In the end, it can be said that both of these insurance policies are way different from each other and are used for different purposes. Marine insurance users are mostly industrialist or a business person, whereas life insurance users could be a common people or an industrialist as well.
References
- https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=7420&context=penn_law_review