Q.Distinguish between Life Insurance and General Insurance.

Life insurance and general insurance differ in the very nature of the contract, when insurable interest must exist, and whether the insured event is certain or uncertain.

Nature of the contract: Life insurance is a contract of CONTINGENCY — the insurer pays a fixed, pre-agreed sum assured on the specified event, regardless of any 'actual loss' (since human life has no measurable pecuniary value). General insurance (fire, marine, etc.) is a contract of INDEMNITY — the insurer compensates only the actual financial loss genuinely suffered, never more.

Insurable interest: In life insurance, insurable interest need exist only at the time the policy is taken out (inception); it need not continue to exist right up to the moment of the claim. In general insurance, insurable interest must exist at BOTH the inception of the policy AND at the time of the actual loss.

Certainty of the event: In life insurance, the insured event — death — is CERTAIN to happen eventually; only its exact timing is uncertain. In general insurance, the insured event itself (a fire, a marine casualty) may or may not ever occur at all. …