Insurance is classified into two broad categories namely; Long Term and Short Term insurance.
- Long Term Insurance: Long-term insurance refers to policies that last for more than one year. These insurance products mainly cover risks related to life. Examples include life insurance, education insurance, and credit life insurance. They provide payments in the event of death or when the policy matures.
- Short Term Insurance: Short-term insurance refers to policies that last for one year or less. These policies cover both life and non-life risks. Examples include motor vehicle insurance, personal accident insurance, medical insurance, public liability insurance, and fidelity guarantee insurance. These products provide compensation for financial losses caused by covered risks during the policy period.