marconi2
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Joined: 02 Nov 2011
Posts: 64
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 Posted: Thu Nov 03, 2011 5:00 am Post subject: What Is The Difference Between Life Insurance And Life Assur |
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A life insurance policy will help safeguard your family’s future and offer them some degree of financial security in the event of your death. To put it simply, life insurance will pay out to your family either a single sum or a series of smaller sums if you were to die. Unfortunately many people do not like to think of what might happen after they die – after all, the thought of dying is quite a morbid topic. However, a life insurance policy will give much peace of mind and reassurance that your loved ones will not be burdened with unnecessary worries if the worst were to happen.
Some people are confused about life insurance and assurance – they are slightly different. Insurance covers for a defined term – for example an annual motor insurance policy. Life terms are for a stated number of years and then cover stops. Assurance refers to an event that is assured to take place – the policy is for an insured’s whole life, unless it is cancelled, thus the event will definitely happen at some point.
Life assurance on the other hand, has a savings element attached to it. It is often called ‘whole life insurance’ because it is not limited to a specific term like standard life insurance. The monthly premiums are invested and this means that the value of the fund may grow over a period of time and accrue bonuses.
These can be further summarized into two categories. Life insurance is a protection policy – it pays out a lump if a particular event were to happen, normally a death. In other words it provides a degree of cover for something that might happen. Life assurance is an investment policy where capital is grown with the investment of monthly premiums, and provides cover for something that is certain to happen.
In recent years life assurance policies have performed poorly and are not as popular as they once were. They rely, as do many other financial products, on strong market conditions to give good returns. A better return is often obtained by selling the policy to a specialist broker although penalties are usually enforced if a policy is cashed in early.
When people are searching for protection for their family and their mortgage, they often confuse the two terms. Life insurance is generally cheaper and is usually what people are after. This is why it is always important to talk to a qualified adviser if you are thinking of making any sort of financial commitment.
Learn more about the types of life insurance available including critical illness cover. Stop by Premiumlifecover.co.uk site where you can find out all about life cover and how it can help protect your family.
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