Life Assurance
Life insurance products are divided into life insurance and life assurance. Insurance protects insureds from possible or potential perils as opposed to the certain perils of life assurance. While death is inevitable, life assurance is called such because it assures a payout even if the insurable event does not occur. This is different to life insurance and all other short-term insurances which payout only on certain conditions.
Life Assurance
As suggested in the name, life assurance assures the policyholder of a payout, even if the conditions of the policy for a claim have not been met. This means that life assurance has a cash value such as an investment bond or pension fund. As a result, life assurance becomes equitable instead of a liability and can be borrowed from like an investment account.
Even the policyholder of a life assurance policy does not die or become disabled, he or she can cash in the investment portion of the policy for its cumulative cash value. Life assurers though place penalties on the insured for doing this to prevent them from liquidating their polices.
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Life Insurance
Even though it may be long-term life insurance, does not always guarantee a payout. According to most life insurance policies, certain requirements or events have to be met in order for the insurer to pay out a claim. If these conditions are not met, then no payment will be made. This implies that there is no investment value associated with a life insurance policy. That is, no part of the policy may be cashed in.
Even though the two types of life cover differ in terms of payment, they have become synonymous as most life assurance companies offer life insurance as well. When taking out life cover, make sure you know which policy you’re purchasing; whether or not your life insurance comes with an investment portion. If a pension is what you’re after, make sure you speak to Life Assurance Company or one of their associated brokers.
You may not be able to apply for direct life assurance. Before you begin comparing quotes, make sure you know what policy you’re look for.
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