Do you need a life assurance or life insurance quotation? September 23, 2009
Posted by admin in : Buying Life Cover, Life Insurance Policies , trackbackThey may sound similar but there is a big difference between a life assurance and life insurance quotation.
Any type of “Insurance” is protecting against someting that may, or may not, occur. For example, a car insurance policy is designed to pay out if your car is damaged by fire, theft or an accident. But none of these events are certain to occur during the policy term. A life insurance policy works in the same way in that it pays an amount of money if you die during the chosen term in years. Again, you may live longer than the policy term or you may die before it and then the insurer would pay out the cover amount.
A “Life assurance” policy is different in that the insurer knows that it will have to pay out at some point. These policies can come in two types, a Whole of Life Assurance and Term Life Insurance. As the name suggests, a Whole of Life policy continues until you die and the insurer will then payout on your death. A Term Life Insurance policy has a set end date and the insurer will then payout on your death or on the policy’s end date, which ever comes first.
Another difference between ‘insurance’ and ‘assurance’ is how Life Assurance policies are funded. In order to support the policy sum assured throughout the term, part of the premiums paid are invested. This means that any payout comprises of either the total value of the investment fund accumulated or the guaranteed sum assured chosen at the policy start date.
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- What options to look for in your Term Life Insurance quote
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