Differences Between Similar Products
Jun 7, 2011 by khristine
What is the Difference Between Insurance and Assurance?
Because of the many uncertainties in life some people are attracted to buying life policy. They do this either to protect their business and other properties, secure future family finances, payment for funeral and burial expenses, or even as an investment for retirement.
Whatever the reasons may be, it should be taken into consideration to learn more about the kind of policy that one is taking into account, what it offers and its coverage. This is important because there are financial jargons which can be misleading if not familiar with it. In this case, the terms “insurance” and “assurance” are usually confusing primarily because the companies themselves that are offering these types of services are shuffling the two different terms.
To clarify the confusion once and for all, insurance refers to the kind of policy that provides financial protection under the conditions of an unexpected incident – example is critical illness. Assurance on the other hand refers to the kind of policy that provides financial protection under the conditions of an expected incident – example is death.
Insurance is time constraint under the name known as “policy term”. And in the case of an insurance policy, financial support will only be provided under the conditions that the premiums are maintained and that the “incident” happen within the policy term.
Life assurance on the contrary is different because financial provision is already guaranteed as the “incident” is already expected to come. Aside from an insured lump sum, assurance policy also includes an investment factor which means that the policy value may increase in time while bonuses that come from the investment are included.
The offices that offer assurance policies are called “Life Offices” and the offices that offer insurance policies are called “Insurance Offices”.
Although both policies offer to provide financial protection, insurance and assurance are two different policies that are mainly based on the incidents that may happen and the incidents that will surely come.
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