Life Assurance
Life assurance is a sort of life insurance coverage that lasts perpetually as long as you make monthly payments. A life assurance policy is guaranteed to pay out if you die.
Ordinary life insurance often has a ‘term,’ which means your policy will run for a set number of years. Because your loved ones will only get a tax-free payout if you die during that period, not all plans will pay out. However, there is no term with life assurance: one policy will cover you for the rest of your life, which is why it is also known as whole life insurance.
Life assurance is frequently more expensive than term life insurance since it is guaranteed to pay out at some time in the future.
How Life Assurance works
When you get life insurance, you may choose how much you want your loved ones to receive when you die. To retain your insurance, you’ll have to pay monthly payments. These payments depend on the eventual payout; a larger lump sum equals greater premiums. Some insurance companies may enable you to cease paying into your policy at a particular age, generally about 85, without losing coverage.
Difference between Life Assurance & Life Insurance
Life insurance and life assurance both help you offer financial stability to your family after you die, but they function in somewhat different ways. Here are the key distinctions between life insurance and life assurance:
| LIFE ASSURANCE | LIFE INSURANCE |
| One policy will last you for the rest of your life. | Life assurance usually only comes with a level or increasing term. |
| You can get life assurance at any age; that is why it has been sold to those over 50’s. | Life assurance often guarantees acceptance – your insurer won’t ask for a health check first. |
| Your premiums can be invested in the market, potentially increasing the value of the lump sum. | Premiums are usually higher with life assurance. |
| A policy will only last for a certain number of years. | Life insurance has extra options, such as decreasing term insurance to cover a mortgage. |
| Ordinary life insurance often comes with age limits – it might be harder to get a policy after 60 | A medical checkup is required, and your insurer will want to know if you drink or smoke |
| Ordinary life insurance isn’t invested, so the lump sum usually stays the same or decreases | Life insurance is usually the cheaper choice |
