Insurance or assurance, what is the difference?
It is easy to be confused with the term life insurance and life assurance. They are sometimes used without being defined by the insurance companies advertising insurance policies.
The clue to understanding the difference lies in the word assurance, very similar to assured.
A life insurance policy is one that has a defined term (length) and will pay out upon the death of the insured during the term. The life insurance policy will not pay out after the term expires, even if the insured were to die the very next day.
A life assurance policy does not have a fixed term. It is in force for the whole of the life of the person and therefore is assured to pay out upon their death. These are often referred to as whole of life policies.
Which type of policy will suit you depends on many factors, so it is good advice to speak to a financial adviser. Certainly for death tax planning and funeral costs a life assurance policy is something to consider, whereas a mortgage with a fixed term, a lower cost term life insurance policy might be better. You can have several policies so you don’t have to put all your eggs in one basket and good financial planning is something that will take this into account and have policies appropriate for your needs.