Insurance |
Investment |
Designed to provide financial protection against unexpected events or losses |
Designed to grow wealth over time |
Provides coverage for specific risks, such as death, illness, or property damage |
Do not provide specific coverage |
Pays out a benefit or compensation in the event of a covered loss |
Provide returns in the form of capital gains or income |
Generally considered low-risk investments because they provide a guarantee of payment in the event of a covered loss |
Investments can be higher-risk, depending on the investment vehicle |
Typically a short-term product, with coverage lasting for a set period of time |
Generally longer-term products, with a focus on growth over several years or decades |
Can be difficult to sell or convert to cash |
Can be more easily liquidated |
Heavily regulated |
Subject to less regulation |
Often tax-free |
Investment returns are subject to taxation |
Often require specialized knowledge and expertise |
Can be more accessible to a wider range of consumers |
Difference between insurance and investment
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