Difference Between Life Insurance and Life Assurance

What is the Difference Between Life Insurance and Life Assurance?

Let us take a look at the difference between life insurance and life assurance:

Life Insurance Vs Life Assurance 

Life insurance and life assurance, both provide peace of mind that your family will receive a benefit amount in case of your unfortunate demise. This can be used either to pay back the outstanding loans and liabilities like mortgages or cover other requirements. As discussed, the main difference between life insurance and life assurance is that life insurance provides you coverage for a set tenure, whereas life assurance provides you coverage for your entire life. The advantage of life insurance is that the premium amount is lower than the life assurance, and you can choose for how long you want coverage. In life assurance, the main advantage is that you will get cover for your whole life, although if you select an investment-linked plan, the sum your loved ones will get during the claim is not guaranteed.

Premium amounts for both types of coverage will depend on your health, lifestyle, age, and income. For example, a young individual who is a non-smoker and is in good health will pay a lesser amount for life insurance or life assurance than an individual who is a smoker and has pre-existing ailments.

What is Life Insurance?

Life insurance is the best way to build wealth and protect your family members financially in the event of the unfortunate death of the policyholder. Life insurance plans can be availed through term insurance plans and investment plans. In this, the insurance company promises to pay a specified amount of money to your family or the appointed nominee, in case of any eventuality, in exchange for regular premium payment over a time period. These payments are called premium amounts which are generally paid on a monthly, quarterly, annual, or semi-annual basis.

So, in case of the policyholder’s death or if the plan matures, the insurer shall pay the individual or his/her family a lump sum amount after a fixed time. There are different types of life insurance plans to suit the individual’s requirements.

What is Life Assurance?

Just as life insurance, the life assurance plan pays out a tax-free amount to the policyholder’s nominee in case of the unfortunate death of the policyholder. Though life assurance generally covers the life assured for their whole life – it is also called a ‘Whole of Life’ cover.

Life assurance is a plan in which an insurance company pays reimbursement for a fixed occurrence like death. Assurance plans offer continuous life cover until the death of the policyholder. For example, a whole life plan provides financial security for the remaining life of the policyholder.

Which is Best for me? - Life insurance vs Life Assurance?

The decision of opting for life assurance or life insurance will depend on your individual requirements and what you are looking out for your family from this type of life cover. If, for example, you want that your mortgage will be covered in case of your death, then life insurance is the right option for you.

If you want peace of mind that your family members will receive a lump whenever you die, life assurance may be the right option for you and suits your requirements. Ultimately, the choice is yours.

Wrapping It Up!

The difference between life insurance and life assurance is that life insurance provides financial coverage to your family if you pass away within the policy term, but life assurance is there to cover your family for your whole life. In both life insurance and life assurance, your premium amount will depend on a variety of factors like age, your current health status, life cover, and family’s medical history.

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