1. Type of Contract:

The fire insurance is a contract of indemnity, where payment of loss will be made only when fire occurred, but the life insurance contract is a contract of certainty, wherein payment is certainly made.

2. Occurring of Event:

The fire may or not occur in fire insurance but in life insurance the death will certainly occur.


3. Classification of risk:

There are numerous types of risk in fire insurance whereas the risks in life insurance are divided into three classes the standard risk sub-standard risk and uninsurable risk.

4. Period of Insurance:

The term of insurance in fire insurance does not exceed generally more than one year but in life insurance it lasts for a very long period.


5. Protection and Investment:

Fire insurance includes only the element of protection whereas the life insurance includes the element of protection and investment because the premium paid or sum assured is returnable in the latter case whereas no premium or amount is returnable in fire insurance.

6. Insurable Interest:

In fire insurance, the insurable interest must exist from the date of the proposal to the date of completion of the contract whether by death or by expiry of term. In life insurances insurable interest must exist at the time of proposal.


This is the reason that the insured property, insurance policy, or policy amount-cannot be assigned to others in fire insurance whereas it is freely assignable in life insurance.

7. Moral Hazard:

The degree of moral hazard in fire insurance is maximum whereas it is very nominal in case of life insurance.