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Answer: Life insurance covers the risk of death and pays a fixed sum; fire insurance indemnifies actual loss of property caused by fire.

PointsLife InsuranceFire Insurance
1. Subject matterHuman life.Property such as buildings, machinery and goods.
2. IndemnityNot a contract of indemnity; the sum assured is paid.A contract of indemnity; only actual loss is compensated.
3. Insurable interestMust exist at the time of taking the policy.Must exist both at the time of the policy and at the time of loss.
4. PeriodLong term, usually 5 to 35 years or whole life.Short term, usually one year, renewable.
5. Certainty of claimAmount is paid on death or maturity, so payment is certain.Amount is paid only if loss by fire occurs.
6. Investment elementHas an element of saving and investment.No element of saving or investment.
7. Surrender valuePolicy has a surrender value.Policy has no surrender value.
Doubtly AI · 28 Oct 2026 AI-verified · Oct 2026 Report
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