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Life assurance vs insurance

Written by Frankie Entwistle

Life assurance and life insurance aren’t the same thing. They cover you in different ways so it’s important to understand the difference before you decide which is right for you.

What is life assurance?

Life assurance is also known as whole of life cover, because it covers the policyholder for the whole of their life.

It pays out when the policyholder dies, whenever that happens. There’s no limit to the policy term (how long the policy lasts for), so a payout is guaranteed, as long as the policyholder keeps paying the premiums.

Some providers will stop charging the premiums after a certain age or number of years, but the cover continues for life.

What is life insurance?

Life insurance is a type of term cover, which means the policy pays out if the policy holder dies within a set amount of time (the policy term).

This means the payout isn’t guaranteed, because the policyholder could live past the set policy term.

If you choose life insurance over life assurance, you can take out level, increasing or decreasing life insurance. All these policy types are “term” products, meaning they only last a set amount of time, but they vary when it comes to how much is paid out if you die within the policy term.

Level life insurance

If you choose a “level” cover policy, the amount that is paid out when you die (the sum assured) is set and doesn’t change.

Increasing life insurance

With increasing life insurance, the payout amount increases over time to hopefully keep up with inflation. This tends to be a more expensive type of policy compared to level and decreasing.

Decreasing life insurance

The payout from a decreasing life insurance policy reduces over time, which usually makes the premiums cheaper than level or increasing. This policy works well for people who want their policy to pay off their mortgage, which is reducing over time as they pay it off.

Differences between life insurance and life assurance

There are two main differences to be aware of when choosing between life insurance and life assurance.

  • With a life insurance policy, a payout isn’t guaranteed, whereas it is guaranteed with a life assurance policy.
  • Life assurance tends to be more expensive than life insurance.

Do I need life insurance or life assurance?

It depends on why you want life cover.

Life assurance could be a good option if you want your loved ones to get a payout when you die, even if that’s a long time in the future. You could see it as an alternative to putting money away for your family to inherit.

Life insurance might be a cheaper option if you just want to protect your loved ones from being financially impacted if you die. For example, you could take out life insurance to pay your mortgage off or to support your children before they’re old enough to earn money themselves.

You might decide you don’t need life cover if you reach a time when no-one is financially dependent on you and your mortgage is paid off.

Next steps

We don’t offer life assurance at Beagle Street, but we do offer life insurance with terminal illness cover as standard. While you’re here, why not get a quick quote to see how much it could cost you?

If you’ve decided life assurance is right for you, although we don't offer it at Beagle Street, you can get a quote from our parent company OneFamily.

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Accidental death benefit acts as short-term cover while you’re waiting for a decision on your life insurance application.

Terminal illness cover pays out if you are likely to have less than 12 months left to live, while critical illness cover pays out if you’re diagnosed as critically ill.

Joint life insurance policies

Joint life insurance protects two people under one policy. The policy closes after it's paid out once.

Find out how much life insurance could cost with Beagle Street

Our simple, online quick quote tool will let you know how much cover you can get and how much it’s likely to cost you. There’s no commitment to take out a policy.