Life assurance vs life insurance

Life assurance vs life insurance

Life insurance and life assurance are often mistaken for one another, they even sound alike. Both types of insurances pay out a lump sum upon the death of a policy holder. The main difference is that life assurances offer a whole of life cover, whereas life insurance covers a fixed term.

What is life assurance?

Life assurance is also known as ‘whole of life’ cover. It tends to have no set policy term, with no fixed expiry date, unlike a life insurance policy which has a fixed end date. With life assurance, a payout is effectively guaranteed and a claim can be made regardless of when in their life a policyholder dies, as long as they pay their monthly premiums.

For this reason, life assurance is often seen as an investment product, giving greater financial freedom to the beneficiary.

What is life insurance?

Life insurance provides a set amount of cover for a set term, agreed between the insurer and the policyholder when the cover is taken out.

A payout of the agreed sum is given if the policyholder dies within the term of the agreement, but it’s possible that they might outlive the lifespan of their life cover meaning they would need to take out a new policy, depending on their age.

Life insurance is commonly used to secure peace of mind and financial security for beneficiaries during key moments in their lives, like having kids or buying a home.

The difference between life assurance and life insurance

The main difference is that, with life assurance, a payout is all but certain. Meanwhile, life insurance will only pay out if you die within the terms of your policy.

This means that premiums are likely to be much higher on average for life assurance, making life insurance the cheaper option.

At Beagle Street, we only offer life insurance to help you financially protect your loved ones if the worst were to happen to you. Got a spare 3 minutes? Click here to get your quick quote to see how much cover would cost for you.