Life assurance vs. life insurance
What is life assurance?
Life assurance is also commonly referred to as whole of life cover. Often, there is no set policy term for life assurance (however sometimes the insurer will limit this cover until a certain age). A claim can be made whenever the policyholder dies at any stage in their life, meaning the pay-out is almost guaranteed.
What is life insurance?
Life Insurance acts as term cover, whereby a pay-out can be claimed if the policyholder were to die within the set policy term. The cover amount is chosen by the policyholder within their application. This means the pay-out isn’t guaranteed, because the policyholder may live past the set policy term.
The difference between life assurance and insurance
The key difference is that a Life Insurance claim can only be made if the policyholder dies within the term of the policy. If no death occurs within the policy term then no claim can be made and the policy will end, thus a pay-out is not guaranteed.
Life assurance guarantees that you will receive a pay-out at some stage, this typically means that monthly premiums are much higher than those for life insurance.
So should you choose “assurance” or “insurance”?
To understand whether life assurance or Life Insurance better suits your needs you need to consider what the purpose is. Life assurance can be seen as more of an investment product due to the nature of the guaranteed pay-out, where the purpose is to provide their beneficiary with more financial freedom.
Life Insurance is more concerned with making sure you can still provide for your family if you were to die, by giving them the financial support required to ensure they can pay the bills, mortgage or any other responsibilities.
Now you know the difference, what now?
Beagle Street do not offer life assurance as a service, but feel free to use our Life Insurance calculator to find out how much cover we may be able to provide for you.
