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The aim of this module is to enable students to study the principles and nature of life insurance, the structure and regulation of the life insurance industry from a risk management perspective and the principles of self-funding and alternative risk financing arrangements.

Difference Between Long Term And Short Term Insurance:

Insurance can be divided into two basic categories: Short term and long term insurance

Long term insurance is insurance that covers life-changing events in life, such as death, retirement and disability.

• The purpose of long term insurance is to provide you with an income in the long term (retirement), or a lump sum of money in the event that you become permanently disabled or pass away.
• Long term insurance policies include life insurance, funeral insurance, retirement annuities and endowment policies.

Short-term insurance, on the other hand, is insurance that you take out on your possessions.

• The purpose of short term insurance is to protect you against losses that you may suffer as a result of unforeseen events such as accidents, crime, floods, fires or illness.
• Often, short term insurance policies tend to cover the smaller claims or those things that you may be changing a lot, for example vehicles, household etc.

Simply put, when a life (or anything related to a human being) is insured it is considered to be long term insurance. When it is any other item (ie not related to a human being) it is considered to be short term insurance.

Source: https://www.realpeopleassurance.co.za/difference-between-long-term-and-short-term-insurance/

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