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Life Insurance, Fire Insurance and Marine Insurance – Meaning, Explanation and FAQs

Last updated date: 23rd Apr 2024
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Vedantu’s Explanation for Free for Life Insurance, Fire Insurance and Marine Insurance

Vedantu is the leader in the field of digital education in India and we have been pursuing to push boundaries and bring quality education with ease to all sections of students in India. Vedantu brings to you a detailed explanation on the topic of insurance and its various types which shall be beneficial to all students.


Introduction to Insurance

Insurance is one of the most important safety nets that is being used by individuals and property owners in the modern world. Insurance is basically a bond scheme that you sign with a bank or your insurance provider where the insurance provider promises to pay you a certain amount in case of an emergency or as such a situation arises when you are required to pay a large sum of money to anyone. In return for this, you have to pay a monthly premium to the banks which are charged as per your package and requirements. This way the respective banks earn collectively from all the people who have registered for the insurance scheme and in return they pay the amounts to those people who claim insurance amount when they require it.

Types of Insurance

There are various types of insurance schemes that are present in the market and available for people to get themselves insured. The three most prominent insurance schemes are:

Life Insurance- Life Insurance is the most widely used insurance scheme which is enrolled by people. In this scheme, a person ensures his own life and in case of his natural death or death by accident, the family of the insured person receives the insurance amount.

Fire Insurance- Fire Insurance is the type of insurance in which a person insures his property and in case of damage to his property in a fire accident the insurance provider provides the amount to the person to cover for damages for his property.

Marine Insurance – Marine Insurance refers to a contract of indemnity where the insurance provider covers the losses of ships, cargo, etc by which goods are transferred, acquired, or held between the points of origin and the final destination. 

FAQs on Life Insurance, Fire Insurance and Marine Insurance – Meaning, Explanation and FAQs

1. What is Meant By the Term ‘Insurance’?

The term ‘Insurance’ means to be insured from against any contingencies. Insurance is very popular nowadays due to its necessity. There are many types of Insurance – Life Insurance, Fire Insurance, Marine Insurance, Motor Insurance etc. The insurance is done to cover the losses that have occurred due to accidents.

2. Are Life Insurance Personnel?

Yes, life insurance is personnel. It is an insurance done on the life of the policyholder. Life Insurance is not recorded in the books of accounts also, they are deducted as proprietor’s drawing as the life insurance is of the proprietor or the business owner which is his personal expense.

3. Why is Fire Insurance and Marine Insurance Provided?

Fire and Marine Insurance is mainly provided to the business property. Big business houses are prone to certain accidents, like a fire breakout or even a leakage at sea which might cause loss of goods being transmitted to the destination hub. Hence, in regard to this fire insurance and marine insurance is done.

4. Why is Life Insurance Agreed for?

Nobody can predict their own term in life, hence to protect the family from financial loss after the death of the Karta of the family, the Karta, may agree to the life insurance policy where he is required to pay a fixed sum of money at regular intervals which will be paid as compensation by the insurance company upon the death of the policyholder.

5. What is the importance of insurance?

Insurance has become a very important safety net in the modern world with the rise of the banking sector where every person always faces the risk of an untoward incident and finds himself at a great disadvantage in case of a loss in his life. Insurance ensures that the person will always have some backing behind his assets which will provide support for himself and his family in adverse conditions. There are numerous incidents when people have been to rebuild their lives and properties from the insurance amount.

6. What are the conditions in which insurance providers can reject insurance claims?

As insurance money generally deals with large sums of money and many people claiming benefits, the insurance provider keeps some safety checks to ensure they are not being scammed. There are strict checks during an insurance claim and only when the insurance company is sure that there is no malice in the claim of the individual, they go ahead with the dispersal of the loan amount. Also, in the case of an act of god, the insurance provider can reject the claim of the individual.

7. What is an act of God?

The term “Act of God” is regularly used in the banking and investment sector. An act of god refers to the incidents upon which human beings have no power. These incidents can be of various forms like Earthquakes, Tsunami, etc. However, it is essential to note that not all-natural disasters can be considered as acts of god and there is a definite line that is drawn while defining these incidents. Recently, the corona pandemic was also considered an act of god.

8. What are the major insurance providers of India?

There are several insurance providers in India. These companies which include many start-ups have their own unique brands and business models which function according to their domain. In recent times, you have people ensuring every aspect of their life including their body parts. However, the most trusted and respectable name in the field of insurance providers is the Life Insurance Company of India or the LIC.

9. How can the study materials along with exercise questions on Insurances be downloaded from Vedantu?

The Online resources at Vedantu can easily be accessed using 4 steps:

  • Open the Website of Vedantu on your Laptop or you can log in to the Vedantu App through your phone.
  • Search the subject of Insurance and the topic of Types of Insurances.
  • Click on Download PDF to download the solution in PDF format. 
  • Enter OTP and then the solutions will be sent to your email ID.  

Refer to Vedantu for free chapter-wise solutions and get free access to various other online resources and improve your learning in several folds.