Insurance vs Assurance: Know the Difference

‘Insurance’ and ‘Assurance’ are commonly-used terms in the insurance industry. Both terms are used when the insurance company provides financial aid to the policyholder after accepting a claim. However, several people get confused between the two and use it interchangeably. This article states clear differences between the terms Insurance and Assurance.

Read More

Policybazaar exclusive benefits
  • 30 minutes claim support*(In 120+ cities)
  • Relationship manager For every customer
  • 24*7 claims assistance In 30 mins. guaranteed*
  • Instant policy issuance No medical tests*

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

*Tax benefit is subject to changes in tax laws. Standard T&C Apply

Back
Find affordable plans with up to 25% Discount**
  • 1
  • 2
  • 3
  • 4

Who would you like to insure?

  • Previous step
    Continue
    By clicking on “Continue”, you agree to our Privacy Policy and Terms of use
    Previous step
    Continue

      Popular Cities

      Previous step
      Continue
      Previous step
      Continue

      Do you have an existing illness or medical history?

      This helps us find plans that cover your condition and avoid claim rejection

      Get updates on WhatsApp

      What is your existing illness?

      Select all that apply

      Previous step

      When did you recover from Covid-19?

      Some plans are available only after a certain time

      Previous step
      Advantages of
      entering a valid number
      valid-mobile-number
      You save time, money and effort,
      Our experts will help you choose the right plan in less than 20 minutes & save you upto 80% on your premium

      Here is the Difference between Insurance and Assurance

      Both insurance and assurance might sound similar, but when you buy the policy you actually get to understand the difference between the two. Lets see how both of them differ and are similar to each other.

      Here is table with the difference between Insurance and Assurance:

       

      Insurance

      Assurance

      Objective

      Compensate the damage or loss. Example, Accident, theft, fire damage, etc

      Provide financial support for specified situation. Example, Disability, Death, etc.

      Types of Policies

      General insurance like car or bike insurance, home insurance, etc

      Term insurance, life insurance ULIP, etc

      Coverage

      Property Insurance, medical insurance, two-wheeler & four wheeler insurance.

      Disability, Life and death cover.

      What is Insured?

      Building, content, health depending upon the policy.

      Person/Policyholder

      Renewability

      Annually

      N/A

      Claim Payment

      Equal to the amount of loss or damage caused in an accident. Example, repairing of  bike after accident, hospitalization cost coverage, etc.

      Amount is pre-decided for a specified event or situation. Example, disability, death due to major illnesses like cancer, etc.

      No. of Claims allowed

      Multiple

      One

      Let us begin by telling you about the term ‘Insurance’ first:

      What is the Meaning of Insurance?

      An insurance policy is a contract between the insurance company and the buyer. When a person wants to protect his home, car, etc. in case of an unforeseen incident that causes damage or loss to the policyholder. Then according to the loss, the insurance company provides financial cover so that the policyholder does not have to pay for it out of pocket.

      In order be stay covered under the policy, the policyholder will have to pay an amount as a premium. The compensation or reimbursement provided by the insurance company is approximately equal to the amount of loss. Insurance plans come with a fixed validity period and a specific sum insured amount for which the company is liable to compensate during the validity period.

      If you do not pay the premium on time or do not renew your policy then the policy will lapse and you would not be covered anymore.

      Here is an example:

      Let me give you an example, Rohan purchased a bike. Since it is mandatory to have a third-party liability insurance policy in India, it is suggested that the bike owner purchase a comprehensive insurance policy that can provide overall coverage to the third party as well as you. Rohan purchases the comprehensive plan.

      Since a comprehensive plan provides cover for loss or damage caused to the bike, theft, injury, personal accident cover, loss of life, etc. One day he was going to his office and at a sharp turn meets an accident. Lucky Rohan had comprehensive insurance that provided him financial aid for the damage caused to his bike as well as the sustained injury.

      In case his policy got expired and he did not renew it before the expiry date and he met an accident after that, the insurance company would not provide him cover for the damage and sustained injury.

      What is the Meaning of Assurance?

      The term assurance is used in the insurance industry that to in terms of life and term insurance policies. In a life insurance policy, the policyholder is given assurance that he will receive compensation in case of a certain event like death or disability. Also, if the policyholder survives the maturity period of the policy, he/she would have an option of receiving the amount on monthly basis as a pension. These policies have a longer duration than general insurance policies.

      Here is an example:

      Let me give you an example, Rajiv purchased a life insurance policy. He purchased an endowment plan for himself. He purchases the policy with a sum insured amount of Rs. 50 Lakh. This is a type of plan that provides two types of benefits. If Rajiv survives till the maturity of the policy then he will get a lump sum amount from the insurance company. If Rajiv dies during the policy tenure then the nominee will receive the sum insured amount.

      There are other examples of life insurance policies that are term insurance, ULIP, and Whole life policy.

      So, this was the basic difference between the term insurance and assurance.

      Conclusion

      Purchasing an insurance policy brings you an assurance that the insurance company will provide your financial aid in case of loss or damage caused to you or your asset under general insurance and you get a good return on the maturity of the policy under the life insurance policy or a term insurance policy and in case of your death, the nominee gets the sum insured amount.

      It is also suggested by the insurance industry experts that you purchase insurance policy online as it would be cost-effective and beneficial for you than purchasing it offline. Purchasing the policy will cut out the cost of an insurance agent and you can learn about a particular plan thoroughly. Apart from this, you can compare different plans and calculate the premium rates sitting at the comfort of your home.

      Search
      Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

      Health insurance articles

      Recent Articles
      Popular Articles
      How Can NRIs Save Taxes on Health Insurance in India?

      24 Nov 2023

      Health insurance is an essential buy for people in India as well
      Read more
      Is LASIK Surgery Covered by HDFC ERGO Health Insurance?

      21 Nov 2023

      The growing dependence on electronic gadgets has impacted
      Read more
      Pros and Cons of Health Insurance Portability

      06 Oct 2023

      Getting health insurance coverage is one of the sound steps
      Read more
      Does HDFC ERGO Health Insurance Cover Cataract Surgery?

      05 Oct 2023

      Cataract is one of the most common eye diseases affecting the
      Read more
      10 Essential Things that Should be Included in your Health Insurance Policy

      12 Sep 2023

      The cost of healthcare has risen threefold in the last decade
      Read more
      How to Apply for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY)?
      Ayushman Bharat Yojana is a flagship health insurance scheme launched by the Government of India to offer universal
      Read more
      Best Health Insurance Plans for Senior Citizens in 2023
      Senior citizens are the most prone to diseases. Considering the medical inflation in India, buying health insurance
      Read more
      10 Major Benefits of Ayushman Bharat Yojana
      Pradhan Mantri Jan Arogya Yojana (PM-JAY) is the second component under Ayushman Bharat Scheme. PM Narendra Modi
      Read more
      Does Health Insurance Provide Coverage for LASIK Eye Surgery?
      A vast majority of the Indian population is suffering from vision problems. For some of them, LASIK eye surgery is
      Read more
      Pre-Existing Disease (PED) Cover from Day One
      Pre-existing diseases (PED) are mostly expensive to treat as they are chronic in nature. Unfortunately, most health
      Read more

      top
      Close
      Download the Policybazaar app
      to manage all your insurance needs.
      INSTALL