Life Assurance or Life Insurance? What is the difference between these policies?
July 30, 2018
Today you can take out insurance policies like life assurance or life insurance, on someone’s life, including benefits.
You may have even considered taking one out for yourself, or a loved one. But you’re not sure which one would suit you best.
Should you go for life assurance or life insurance? These policies, although very similar, differ by one simple clause.
Life Assurance or Life Insurance? Let’s look at Life Assurance first
Life insurance has a short life span. Usually taken out by people who are at risk of losing their lives unexpectedly.
For example, those involved in extreme sports, being injured or even burnt at work. The premium paid depends on the insured person’s chances of dying; the higher their chances, the higher their premium.
The policy can be taken out by the insured person or by somebody else, preferably someone who will not profit from their death. When the insured dies, the policy pays out to the beneficiary.
People unsure about the future, and concerned for their family, would want to leave them something in case of death.
A life insurance policy is the best option here. Policies can sometimes include costs such as funeral expenses for the deceased. Get free Life insurance quotes online.
Life Assurance or Life Insurance? Life Assurance explained
On the other hand, life assurance is a lot like life insurance, except there is no set time limit. The beneficiary is guaranteed receipt of the ‘benefits’ after the insured dies.
If the insured outlives the term of the life insurance policy, then his policy is void, and he loses his coverage. Whereas with a life assurance policy, there is no such danger.
Another advantage of life assurance is that apart from the fixed amount the insured must pay every month, they can also invest in the policy.
In the event of the insured’s death, the beneficiary receives the premiums plus the investment. Either in one lump sum or instalments over time.
Life insurance comes in handy when a matter is urgent, but life assurance is more dependable, as it has no time-limit.
The insured can cancel a life assurance policy if no longer required. But they might be heavily charged for this by some companies as a way of putting off other people from doing the same.
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In summary, life assurance covers against an absolute tragedy, whereas life insurance is a policy against an uncertain one.
All info was correct at time of publishing