Today everyone wants to ensure the life of them and their family. The market has launched different varieties of life insurance whose main aim is to spread awareness among the different categories and economically weaker sections of society about the importance of life insurance for their life.
The LIC and GIC come with a slew of perks and services, which will be covered in greater depth in the next section.
Key Takeaways
- LIC offers various life insurance products, such as term insurance, endowment plans, and annuities, while GIC provides non-life insurance products, including motor, health, and property insurance.
- LIC focuses on long-term financial protection and wealth accumulation for policyholders, whereas GIC addresses short-term risks and offers coverage against losses and damages.
- LIC and GIC play significant roles in the Indian insurance sector, but they cater to different insurance needs and risk management requirements.
LIC vs GIC
LIC stands for Life Insurance Corporation of India, and it is the largest life insurance company in India. LIC is a government-owned company and was established in 1956. GIC stands for General Insurance Corporation of India, and it is a reinsurance company that was established in 1972. GIC provides reinsurance services to other insurance companies.
LIC is an Indian insurance and investment company that is under the control of the Indian government. The first company in India was the Oriental life insurance company that offers life insurance, and it was established in 1818.
At that time, when the company was new, its main aim was to target the Europeans based in India. Following their success in this industry, they targeted various segments of society and established various insurance firms from them.
GIC stands for General Insurance Corporation of India Limited, a reinsurance corporation. It is under India’s Ministry of Finance.
The General Insurance Provisions Ordinance, promulgated on 13 May 1971, consolidated and restructured the business of general insurance from 107 entities into four companies. Under act 1956, the GIC company was established on 22 November 1972.
Comparison Table
| Parameters of Comparison | LIC | GIC |
|---|---|---|
| Definition | LIC works on the basis of life risk and their factors and some contract insurance is included in this type of LIC insurance. | General Insurance covers the insurance of different types except for life risk. |
| Term | It is long-term-based insurance It is short-term-based insurance. | It is short-term-based insurance. |
| Savings | It is like a form of investment where some saving components are included. | It’s a reinsurance contract. No such saving components are included. |
| Premium | You have to pay for the premium over the duration of year. | Premium will be paid but only in a specified amount. |
| Policy | It can be done for any amount based on the policyholder’s willingness to pay a premium. | Regardless of the policy value, the amount payable under non-life insurance is limited to the actual loss. It can be done for any amount based on the policyholder’s willingness to pay a premium. |
What is LIC?
Insurance is related to personal property, life, and health so it was very important to grant the permission of the government of India because money is involved in this insurance so to provide safeguard ad security to the people of India corporation of LIC first grant permission from the government.
On 1 September 1956, the parliament of India passed the provision of the insurance industry, then the Life insurance corporation of India was established.
There are many benefits of different types of LIC policies that many people are still unaware of. Who does not want to get the benefits when there occurs some mishappening and money lost at a very high rate?
So LIC companies do the same work based on their policy. The first one is death benefit: Unfortunately, if an unexpected event occurs and there is the loss of any family member the insurance company gives the compensation of that.
The appointed nominee receives the full amount assured as well as any bonus that has been earned over time. Life insurance companies give the befits of tax deductions to the employees.
If the employees have life insurance, then under section 80C you can get a maximum deduction of 1,50,000 in your tax.
What is GIC?
On 22 November 1972, under the act of companies, 1956, GIC was established. GIC is a contract in which if something mishappening other than death occurs then, the company will pay that party.
There are various types of GIC including Home insurance, motor insurance, commercial insurance, travel insurance, health insurance, and crop insurance.
You can choose the above insurance that you want and when there will be a need, you can claim for that to avail of the benefits of your insurance.
When GIC is there then, there is no need to worry about any risk related to your family or property. If you have a car, do not think about the damage cost as if you claimed the insurance, you will get the return pay for that loss.
One can take health insurance to protect the family from any injuries and provide medical insurance to them.
Today health insurance is in great demand no one knows what is going to happen after a moment due to this, health insurance can prove to be the most beneficial for the people who are cautious about their family and are living far away from them.
So to ensure their health, life, and medical issues, health insurance can prove to be the best option.
Main Differences Between LIC and GIC
- LIC insurance gives you the insurance of life risk while GIC does not cover life risk and includes various types of insurance like motor, home, property insurance.
- LIC is a long-term investment in which people have to pay after some tenure as a safeguard for their protection. On the other hand, GIC is a short-term investment in which you can avail the benefits at any time.
- In LIC, at the time contract the insurable interest must be present there but in GIC presence is important in both the time i.e. loss and time of contract.
- The saving component is present in LIC but not in GIC.
- In LIC, one can get the sum when some mishappening occurs or at the maturity of the term, but in GIC, one can avail of the benefit only when the uncertain event occurs.
- https://www.indianjournals.com/ijor.aspx?target=ijor:sajmmr&volume=7&issue=3&article=006
- https://search.proquest.com/openview/c32e2d0aec9eeb704c1fb4ca7f93724c/1?pq-origsite=gscholar&cbl=2030008
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