Insurance or Assurance
Insurance versus assurance: what is the difference?
Should you care?
Yes!!
The world of finance is extremely complicated and there are many factors to consider when choosing any financial protection product.
When looking for a policy you need to know what you are looking for and what is on offer in order that you get the right cover for your needs.
One thing that many people find confusing is the specific use of the term "insurance" and the use of "assurance". What are the differences between them?
In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.
For the purposes of financial provisions, a life insurance policy provides cover for a set period of time. If the worst were to happen during that time (and there are no complications), then the insurance company will be required to pay out the agreed sum to the beneficiary. The only time the policy has any real monetary value is if there is a claim made for payment as a result of an event triggering that claim, such as the death of the person covered. If the person outlives the term of the policy, then the insurance policy will cease and no payment will be made.
Life assurance is different from insurance, and will always result in a payment. This is achieved by combining an investment element along with and an insured sum. This means that over time the value of the policy can increase as the investment bonuses are added. If a person covered by life assurance were to die, then the insured sum would be paid out, alongside the investment bonuses which would have accrued over time. If it is necessary to cancel the policy prior to the end of any designated term period, or the death of the life being covered, then once an investment bonus has been added, the life assurance policy will have an encashment value. It is therefore possible to cash in a policy earlier than its usual termination date, in order to collect on the investment portion. It should be noted that many insurance companies place penalties for cashing in policies early.
The distinction between the two terms has become increasingly blurred. This is principally due to many companies offering both types of policy and grouping insurance and assurance titles in similar contexts, sometimes interchanging the two terms. Richard Brown, Chief Executive of Moneynet.co.uk, clarified the situation by stating, "most life insurance companies offer a wide range of insurance and investment services - for example pension, investment funds, investment bonds, car insurance, home & contents insurance, life assurance, and even loans. Sometimes a 'life insurance' company will call itself a 'life assurance' company but they mean one and the same."
More companies within the financial services industry have realised that consumers are becoming increasingly baffled by the choice of financial products available. Although this confusion has resulted in a certain amount of apathy, many firms are resolving the situation by providing comprehensive information guides. This has lead to an increase in the number of the online financial guides and glossaries that have become available.
Sites such as Moneynet, Moneyfacts, and MoneyExtra not only provide comparisons of financial products, but also information to help consumers make informed decisions. With organisations like Which? writing publications such as 'Be Your Own Financial Adviser', the focus has turned to providing consumers with sufficient information to make their own financial judgements.
About Rachel
Rach sits next to Rich and together they inspire the world to get to grips with personal finance topics. Together they contribute to Cashzilla, their personalfinanosaurus blog.
Cashzilla is an Aries. He has a flamboyant character and a tongue that could heat up any conversation. If Cashzilla was an A-Team character, he'd be Murdock.
Cashzilla has recently started dating Nessie, the Loch Ness monster. It's still early days, but both monsters say they're very happy.
To read more about this torrid affair, visit Cashzilla at http://www.cashzilla.co.uk
Latest News
Deal-Seeking Travelers Should Not Overlook Need for Travel Insurance MarketWatch - Although travelers are seeking deals and jumping on last-minute travel offers, Travel Guard reminds consumers that travel insurance remains essential no ... From Homeowner to Renter: What You Need to Know About Renter's ... |
 WWL | 21st Century Holding Company's Subsidiary Federated National ... MarketWatch - an insurance holding company, today announced that it received approval from the Florida Office of Insurance Regulation (OIR) to take out (assume) up to ... La. grand jury indicts former head of state-run insurance concern Ex-CEO of Citizens Property Insurance indicted Former chief of Citizens Insurance indicted |
 dBTechno | Insurers propose universal, centralized healthcare Los Angeles Times, CA - Several consumer groups criticize the early bid by America's Health Insurance Plans, a trade group that fought an overhaul in the 1990s, to take an active ... Medicine for the Job Market Health Insurance Trade Group Proposal Praised By Sen Kennedy Nurses Reject AHIP Proposal as a 'Marshall Plan for Health Insurers' |
Electric Insurance Appoints Sweet & Sons, Inc. MarketWatch - "When looking for a new relationship with an agency, Electric Insurance seeks agencies that have track records of delighting customers," said Michael J. ... |
White & Case Recruits Top Bank, Insurance Regulatory Lawyer MarketWatch - NEW YORK, Dec 04, 2008 /PRNewswire via COMTEX/ -- Global law firm White & Case LLP is expanding its firmwide Bank and Insurance Regulatory Practice with the ... |
American Family Insurance Selected as Recipient of 2008 E-Fusion Award MarketWatch - OLDWICK, NJ, Dec 04, 2008 (BUSINESS WIRE) -- American Family Insurance's Teen Safe Driver Program, which uses a mobile video and online notification system ... |
AARP’s Stealth Fees Often Sting Seniors With Costlier Insurance Bloomberg - He signed up for an auto insurance policy endorsed by AARP, believing the advertising that said he would save money. He didn’t. ... Health Insurance, Business Lobbyists Join Discussions About ... |
CSC Announces Social Networking Community for Property and ... MarketWatch - today announced the latest innovation in the evolution of its property and casualty (P&C) insurance client community: the introduction of WikonnecT, ... |
 ABC News | Bernanke says home price insurance would be costly Reuters - WASHINGTON, Dec 4 (Reuters) - An idea floated by some economists to encourage home buyers to purchase home price insurance would be costly in the current ... Bernanke calls for measures to stem foreclosures US Fed demands foreclosures push Bernanke Says US Must Step Up Foreclosure Efforts (Update1) |
IBC Insurance buys up InsCorp Bizjournals.com, NC - The purchase of the company expands IBC Insurance’s presence in Laredo and increases the growth that it is seeing in all markets and business segments. ... |
Resources
-
The Secret Information Site
"
-
Pet Insurance
Discover the secrets that pet Insurance companies don't want you to know.
-
Safety Employment Safety Jobs
Jobs in occupational safety, Insurance loss control, health/environmental, etc.
-
Free Prescription Medicine at Medicine For Free - Home
Free Prescription Medicine is Available to those who qualify. Millions of Americans daily choose between buying food or medicine. This choice is often a life or death matter faced by those with no Insurance to cover medicine or governmental prescription a
-
Welcome to PMI Savings :: Save On or Get Rid of Hidden Mortgage Insurance
How to Cancel Pmi with Official Form.
-
Real French Life ebook
Real French Life eBook guide to schooling, Insurance, day to day life and more in France.
-
Sales Lead Generation. Health Insurance, Real Estate, Life Insurance, Mortgage Leads and MLM Leads
Sales Lead Generation for Pennies. Learn How We Generate Business Sales Leads using our Affordable,Proven Sales Lead Generation System.
-
Annuity Online Quote Annuities Fixed Variable Immediate Equity Indexed Annuity Retirement Planning I
Annuity annuities online quote comparison variable fixed annuity indexed retirement planning tax deferred immediate annuity investment retirement annuity planning Fixed Annuity Life Insurance Company Annuity Rate Comparison Variable Life Annuities Definit
-
Insurance Leads Generation
Insurance Leads Generation
-
Used Cars For Sale By Owner, Used Car Dealers, Sell Your Used Car Free, Auto Insurance, Financing -
Used cars for sale by private owners, sellers, sell used cars free, dealerships, used car finder service, used cars quotes, used car financing, and more.