What Is Life Assurance or Insurance?
We tend to invest a great deal of time and money in life assurance or insurance in general, and it can be difficult to keep up with which tasks various different products perform.
Here’s an example: take term life insurance and life assurance, do you know what the difference between the two are? Have you heard of the two different products? This article takes a look at the difference.
If you do not have a basic understanding of the insurance industry; the different types of products on offer and exactly what they cover; it can be difficult to make an informed decision. You don’t want to be in a situation where you do not know what you are purchasing and what the policy covers so that you simply settle for any policy. This could result in you either being under insured or paying premiums that are too high.
Do I Need Life Assurance or Insurance?
Life assurance or insurance insures a policy holder for a certain period of time – referred to as a policy term. If the policy owner were to pass away during the policy period, the insurance company pays out the claim to the insured’s beneficiary. However, if a person takes out a policy for a specified period of time and outlives that period, or term, the policy has absolutely no residual value. That means that the policy will end without the policy holder receiving any monetary pay out. So the policy only has value in the event of a claim. Term life insurance, though, covers the costs in the event of an unforeseeable occurrence.
Life assurance, or insurance for insurance, is somewhat different from life insurance. Life assurance policies typically pay out a claim in the event that an occurrence is certain to take place. These types of policies always pay out, be it in the event of reaching a particular age or dying. It is for this reason that these policies are used as a method of life insurance and savings for retirement.
If the insured person were to die within the coverage term, the insurance company will pay out a claim to the policy holder’s nominated beneficiary in order to support them financially. This is the insurance component of the policy. The investment element is where the assurance provider takes a portion of the policy holder’s monthly premium and invests it. By the time the insured reaches a certain age, the provider pays out the invested amount that has accumulated over time.
Before choosing a policy, do as much research as you can to determine what is on offer and what type of coverage would suit you most.
Next step: Complete and submit the form on this page to get a life insurance quote
All info was correct at time of publishing