There is a small but significant difference between life insurance and life assurance. This is despite the fact that many people believe they are the same thing.
Life insurance only covers the policyholder for a set period of time. However, fife assurance protects the policyholder for the entire term of the policy.
Because assurance deals with “certainties,” there is no way for it not to happen.
Insurance protects against “uncertainties” that may or may not occur.
For example, with auto insurance, you may not need to file a claim until you decide to purchase a new vehicle or until the vehicle is replaced.
Striking Differences between Life Insurance and Life Assurance
What is Life Insurance?
Life insurance is defined as a contract between an insurance policyholder and an insurance company. In this contract, the insurer (insurance company) agrees to pay a particular sum in exchange for a premium upon the death of an insured person (policyholder) or after a specific period of time.
Life insurance provides coverage for the duration of the policy. In the event of your death during the policy period, your beneficiaries will receive a tax-free sum of money. If you live longer than the policy’s term, your beneficiaries will not get any money.
What is Life Assurance?
A “life assurance” is a contract between an insurance policy holder and an insurance company. It is defined as a guarantee issued by the insurer to make a payment in the event of the death of an insured in exchange for a premium.
Life assurance, on the other hand, is based on the concept of coverage that lasts until death rather than a set period of time. As a result, with life assurance, a payout is frequently made upon the death of the policyholder.
Both life insurance and life assurance provide you with peace of mind by providing your family with a lump sum in the unfortunate event of your death.
You can use this to pay off debts or satisfy other requirements. The fundamental difference, as previously stated, is that, unlike life assurance, which covers you until death, life insurance insures you for a defined length of time.
The cost of both types of coverage will be determined by your health, age, lifestyle, and income. A person 50 years old, for example, will pay more than a person 25 years old.
Between Life Insurance and Life Assurance, Which Should I Pick?
The decision to get coverage is entirely based on your own requirements and the family plans you have in place. For example, if you want your family to receive a lump sum in the event of your death, life assurance will suffice. If you are concerned about your mortgage, life insurance is the best option.