Ever wondered What is Life Assurance and What is Life Insurance?
Sometimes insurance companies have referred to life insurance and life assurance as the same policy. The two policies are completely different. So what is life assurance? What is life insurance?
Life Insurance grants insurance cover for a period of time leaving the beneficiary with nothing when it expires.
The policy also doesn’t allow its owner to invest in it, making it purely about insurance.
Life Assurance is a mixture of investments and insurance and runs for a longer period.
One unique type of life cover called ‘Whole of Life’ runs for the whole of the beneficiary’s lifetime.
If this policy comes to an end before or after your death, you are guaranteed a payout. The payout is usually bigger if the insured person is still alive at the end of the policy’s term.
What is life assurance?
Most people opt for life insurance, due to its low cost. However, it can end up being of no value if the insured person outlives the policy term.
With life assurance, you can always be sure to get something at the end of the policy’s term.
What life assurance guarantees is that you leave your loved ones in a financially stable position after your death. It will help them take care of funeral expenses, debts and mortgages.
It is also possible to cash in early on this policy, which comes in handy in case of an emergency. However, most insurance companies charge a hefty penalty to put off policyholders from cashing out early.
Insurance providers need to assess if you qualify for insurance
The process of getting a life assurance policy is slightly similar to that of a life insurance policy. The insurance company you choose must make sure that you are insurable.
Certain factors, like your health, job, smoker or non-smoker will determine whether you are insurable or not. Only after this process is complete can you begin discussing your preferred policy.
As this process is taken care of by underwriters who work for the insurance company, do your research on insurance before taking out a policy. As the saying goes, ‘Knowledge is power.’
Also, it wouldn’t hurt to be a few steps ahead of the insurance company. Especially when it comes to the policy that you want to buy and the potential cost of the premium that you are going to pay.
By doing your own research you can predict whether or not the company decides if you are insurable or not. And if you are insurable, how much they will expect you to pay in premiums based on your health and mortality rate.
Although it is possible to buy a life insurance policy online, it’s not the same as for a life assurance policy. Instead, if you want to buy a policy, do so from a financial advisor.
If you enquire “What is life assurance”? Advisors will help you through every step of the contract. Go online and get free Life insurance quotes.
What is life assurance? Now that you know, it just goes to shows how much more seriously a life assurance policy is taken compared to a life insurance policy.
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All info was correct at time of publishing