| Basis of Difference | Life Insurance | Fire Insurance |
| Compensation | Compensation is paid either at the time of the death of the insured or at the maturity. | Compensation is paid only in the event of loss due to fire. Nothing is paid otherwise. |
| Duration | The duration of life insurance is long; it is typically from 5 years to more than 25 years. | It does not generally exceed 1 year |
| Indemnity | The principle of indemnity does not apply here, as the life of the insured cannot be compensated. | Compensation is based on the principle of indemnity. |
| Insurable interest | Insurable interest must exist at the time of taking the policy and not necessarily at the time of receiving the claim. | Insurable interest must exist at the time of taking the policy and also at the time of receiving the claim. |
| Subject matter | The life of the insured is the subject matter. | The goods and property of the person make the subject matter. |
| Measurement of loss | Loss incurred cannot be measured. | Loss incurred can be measured. |
