Life assurance is a product offered by insurance companies, but a very different policy from life insurance itself. With life assurance, the contract that is made between the insurance firm and the policy holder agrees to make a payment on the policy after the individual’s death – or in some cases, in the event of their terminal or critical illness.
This is a policy based upon a definite event, not the risk of an event as in life insurance. A life assurance policy also relies upon the policy holder paying regular sums – or premiums – into the policy. The payout itself is made to beneficiaries designated by the policy holder.
At first, the premium tends to be a fixed sum for a 10-year period. After this date, the sum comes under review and the insurer decides whether the investment fund is growing sufficiently to provide the required final sum. If it is not, either the premium will have to be raised or the eventual payout will have to be reduced.
Life assurance is commonly taken out in situations when the policy holder wants the
The cheapest life assurance available is usually something called “term assurance.” It comes in a variety of forms and it protects your family’s financial situation should the worst happens.
What is The Difference between Life Assurance and Life Insurance? In the UK, you are far more likely to hear the word assurance than insurance whilst it is the other way around in the USA. However, the whilst there are technically differences between the two they have come to mean exactly the same thing in most peoples every day language so there is no need to look into this any further. You just need to remember that it is the one policy you hope won’t pay out!
The cheapest life assurance is called term assurance and it normally pays out a set amount should you die during a set period (or term – hence the name). There is no savings element to it and if you cancel it before the end of live to it’s conclusion it will not pay you any return. That is why it is the cheapest life
The average man in the street assumes that Life Insurance and Life Assurance are names for the same form of insurance. How wrong they are! But don’t hang your head in shame, many financial commentators get it wrong too! Life Insurance and Life Assurance perform different financial roles and are poles apart in cost – so it helps to surf for the correct product.
Life Insurance provides you with insurance cover for a specific period of time (known as the policy’s “term”). Then, if you were to die whilst the policy is in force, the insurance company pays out a tax-free sum. If you survive to the end of the term, the policy is finished and has no residual value whatsoever. It only has a value if there is a claim – in that context it’s just like your car insurance!
Life Assurance is different. It is a hybrid mix of investment and insurance. A Life Assurance policy pays out a sum equal to the higher of either a guaranteed minimum underwritten by the policy’s insurance provisions or its investment
When life insurance companies offer life assurance, they are seeking to provide a financial product that is clearly distinctive from the service that gives the sector its name. Under a life assurance policy, there is a contract between the company and the policy holder that allows for a cash payment to be made after the death of the individual concerned, although the payment can also be triggered by terminal illness or a similar catastrophic life event.
However, the basic principle remains: that the policy’s payout is based upon a definite and inevitable occurrence, rather than a risk, as in the case of life insurance. In order for this inevitability to be financially viable for the company involved, regular sums, known as premiums, need to be paid into the policy.
As the payout occurs upon the death of the policy holder, the beneficiaries are clearly not going to be the policy holder themselves. Instead, life assurance requires the naming of designated beneficiaries.
The standard length of time for a fixed-sum premium is 10 years, after which it is reviewed by the insurance company. At this stage, the company
Life insurance, also known as life assurance, is a grey area for a lot of individuals. Speaking for myself – I did not have a life insurance policy in place until my 30th birthday! Luckily I had no need for such a policy before then, but what if I hadn’t been that fortunate?
I believe that if people have a better understanding of what life insurance involves and the benefits associated with it, much more people when obtain life assurance to protect their future!
Let’s take a look at a couple of life insurance terms and phrases.
A is for agent… An agent is an authorized person associated with a specific insurance company and will therefore be able to sell you services and contracts for a specific insurance company.
B is for beneficiary… A beneficiary is the person that is nominated to receive the benefit when the insured passes away. A husband will usually obtain a life insurance policy which will provide for his wife and family once he’s no longer there to take care of them.
C is for contingent
Life assurance industry experts always bang on about the ‘Protection Gap’. This is the difference between the levels of life assurance cover that we have taken out against the amount of cover that the industry believes we need. However, if the latest figure that has been produced by the UK life insurance experts is correct then, as a country we are massively underinsured as the gap stands at a whopping £2.5 trillion, and is growing every year.
We are mainly very good at ensuring that we have the mortgage covered by life insurance should the very worst happen, but it appears that we have totally forgotten all the other costs such as other debts, supporting children and even the mundane, such as living expenses. Of course, those with no dependents have no need of life assurance, but those who do should consider it very carefully.
Unlike most things today, the price of life insurance premiums has actually fallen. In fact, if you compare life insurance premiums to costs ten years ago, they are actually 50% cheaper, meaning that if price was a barrier for most people a few years ago
If you are thinking of taking out life insurance to give your family peace of mind then you are going to want the cheapest policy while ensuring that you have a quality product. One of the cheapest forms of life insurance is term life assurance and you can get the cheapest term life assurance quote by using a specialist website.
Term life assurance can give your family a lump sum payout if you should die during the term of the policy that you have taken out. Taking out life term assurance is the simplest way of taking out life insurance as all you have to do is to decide how much you want to take out and how long you want the policy to last. Term life assurance will last for as long as you have taken the policy out and if you should die before this time then the policy would provide the lump sum you have assured yourself for, to your loved ones. If the policy comes to an end and you are still living then it simply expires and the policy ends without any payout.
Life assurance, as its known in the UK, should be given careful consideration especially if you have dependents. Term life assurance is the most popular type however there are other types you should be aware of that you find better suit your circumstances or wishes.
Whole-of-life policies are offered by most insurance companies. As you have probably guessed they pay the sum that has been assured on the death of the person insured, regardless of when it happens.
Normally you will pay premiums until you reach a certain age, probably around 75 years, however your cover will continue until death. They are however more expensive than term insurance because the life assurance company will have to eventually pay out on the policy.
This life assurance policy will normally be offered in different cover options from minimum to maximum cover. What you choose will depend on how much is invested in the investment fund by the assurance company. With maximum cover the deduction will be much larger and premiums will likely rise to ensure cover is maintained for the policy.
We all want some type of security for our families in today’s economy which is why life insurance is getting a revival. People were buying goods and saving lots of pounds prior to the recent recession, therefore life insurance was not at the top of a lot of peoples’ lists of priority. For some young people there is a great form of insurance that is called level term life assurance. This is a form of insurance that can last for as little or long as you want, depending on what you negotiate with your provider. It is a great alternative to the norm which usually requires a life commitment and possible differences in rates. There are several benefits to having level term life assurance which will be discussed in detail below.
In cases where people are just starting their adult life, level term life assurance is a great choice to make. Most people usually have student loan debt and other various debts that they have accumulated in their early stages of life. In addition to that it can take some people several years to pay off their student loans and become financially stable.
We invest a lot of time and money into different financial products and it can sometimes become difficult to keep up with what tasks different products perform. For example, take life insurance and life assurance: most people do not know that there even is a difference between these two products, never mind what the difference is. If you don’t know the basics of the insurance industry: what the different types of products are, what they offer, what they cover and what not, you simply can not make the right decision. Some people, not knowing what they are purchasing and what the policy covers, will then just settle for any type of policy, often being under-insured and paying too much.
Life insurance insures you for a specific amount of time, known as the policy term. If the insured (you/the owner of the policy) were to die within this period, the insurance company will pay out the claim to the insured’s nominated beneficiaries. However, if you take out a policy for a certain amount of time and outlive this term or period, the policy will have no residual value whatsoever, meaning that the policy ends
There was a time when I, just like most people did not know the difference between life assurance and life insurance. I thought they were one and the same thing! Since back then I have come to realise that I am not the only one who has mistakenly thought this. Many people find insurance terms confusing and many policies can even seem the same except a few differences in wording. However do not be fooled as this is not the case. There is a difference between life assurance and life insurance and you would be wise to learn the differences before you sign that policy!
The reason you may be confused, is not your fault. There are many people within the insurance industry who do not even know the difference and so there is a lot of contradictory information out there. I will explain in the final paragraph why people get mixed up. But first let me explain the differences between life insurance and life assurance.
Life insurance is a policy which is like your car insurance, in that once the ‘term’ or period over
When it comes to getting your life assurance then a life assurance broker can always get you the best deal on your life assurance. It is essential that you get several quotes before you take out your policy and going through a broker is the easiest and quickest way to ensure that have got the best deal possible.
Term assurance is one of the cheapest forms of protecting your life and will pay out a lump sum to your loved ones in the event that you should die during the term of the cover. Before you look for quotes your life assurance broker will need to know how long you want the cover to last and how much you want to insure your life against.
When it comes to taking out term assurance then you can choose to take level term assurance or decreasing term assurance. If you choose to take decreasing term assurance then this means that the sum you are assured for will decrease as time goes by and this usually runs alongside such as a repayment mortgage, level term assurance will remain the same throughout the time
We all of us will hope for a long life but the unexpected can happen at any time. What of those left behind if the worst should happen to the family’s main breadwinner? Who pays the mortgage and the bills? They are normally paid for by the life insurance policy. Find out here how to get the best life assurance quotation.
Buying Life insurance is all about giving you, and your family, the peace of mind that there will be no financial problems should you die prematurely. Life assurance can help your family pay off the mortgage, for instance, or it can provide them with a monthly income to help them to maintain a decent standard of living.
There is the potential hardship of suddenly having to do without an important financial contribution to a household as well as having to deal with the grief of their loss. Getting a life assurance quotation is the first step to making sure that those left behind are able to cope with any financial impact.
You might believe that life assurance is too expensive. Life Cover which pays out a
Your current life insurance policy may not be the most affordable life assurance so look around for something cheaper. It could be costing you dear if you took out a life insurance policy with your mortgage broker when you moved house.
Finding the right life insurance policy might not have been the highest priority when you were coping with all the other stresses of moving. You may have taken advice from your mortgage broker to make things easy but that means you might not have ended up with the most affordable life assurance.
You might be able to reduce your yearly bills by hundreds of pounds by Switching to the cheapest life insurance and you might even get increased cover. The cheapest way to get life insurance, If your need is just life cover, is a term insurance plan. It provides affordable life assurance cover for a set period at the lowest possible.
Is your current policy the best one for you? You might have been tempted to take out some optional extras which put the price up. There are listed here. Do you really need them
Do you recall when comparing life assurance policies used to take days and picking the right cover was a bit like playing the lottery? Thankfully, the life assurance industry has come a long way in the last ten years as a result of improved technology and the internet.
Even so, using the web to compare life assurance can tsill be a minefield if you don’t do it in the correct way. For those looking to take out a policy, most will use one of the growing number of financial comparison services to search for a policy and a big criticism of them has been their over-reliance on price as the main consideration. Whilst this may be true, these sites are still a powerful tool as long as they are used in combination with some simple basic principals.
A Few Essential Questions To Ask Before You Start Searching For Life Assurance
Whilst access to online comparison services has simplified the shopping process for life assurance, there’s a risk that they could cause some consumers to rely too heavily on their quotation results without first understanding what is the most appropriate cover for their needs.
Most people think that life assurance and insurance are one and the same, just with different names. However, this is not the case at all. Each one has a very different role and different advantages and disadvantages. So be sure to get the right one, the one that is actually the best option for you.
Life insurance is for a particular period of time. Only if you pass away during this period will the insurance company pay out the agreed upon amount of money. If however, you outlive the policy, it expires and has no value whatsoever. The only time you get the benefit of a life insurance policy is if you claim.
Life assurance on the other hand is both an investment and insurance. The policy will pay out a value that is equal to an agreed upon amount or the amount you have invested in it, whichever is the highest in value at the time of the claim. The amount you have invested is dependent on how long you have had the policy and been paying premiums and the insurance company’s performance. Should you pass away whilst the
To the ear, insurance and assurance sound remarkably similar. That is probably the reason that most people, depending on their country of origin, believe that when someone uses the term “assurance” in their search engine query they are incorrectly using it in place of “insurance.” However, it might surprise many people that in some countries, insurance companies offer both life insurance and life assurance policies. Americans, for example, only use the term insurance and qualify the difference with the adjective that precedes the word “insurance.”
Life insurance is a policy that will pay beneficiaries only if the insured dies before the insurance policy expires. The insurance policy of this type is known in some countries as “term life insurance.” The word “insurance” is defined as the means of guaranteeing certain protection to a person or object against loss or damage to that same person or object. Using this definition, insurance is offered by companies for a pre-determined length of time, and at the end of that time period, the insured and beneficiaries receive no monetary or other compensation if the insured is still alive and well. If the insured dies before the expiration
A life assurance plan enables you to ensure your family is protected in the event of your passing away, in the policy term. You select the amount of cover you may need and the period of time you would like to be insured for. Your premiums won’t change (unless you change the amount of cover held under the policy or alter the plan), enabling you to budget with certainty. An assurance policy differs from an insurance plan. They’ll pay out a claim in the occurrence of an occasion that’s certain to take place, whereas insurance pays out a claim of an event that may occur. Assurance policies will always pay out, unlike insurance plans. They will pay out in the event of a death, or when the insured individual gets to a specific age. So it can be seen as a type of investment. In case of the policy holder or covered dying within the coverage term or while the policy is still active, the insurance company will pay out an insurance claim to the insured’s selected heirs to pay for your income and also to assist them financially.
So many people are
Life insurance has no ‘investment value’ while Life Assurance is strictly for investment purposes only in most instances. Most life insurance policies provide a measure of ‘security’ and hope to policyholders for the length of the term. However, the policy must be active when the policyholder dies; otherwise, there is no coverage available. If the policyholder has an active policy and finds that he is ill, expected to live a short time, then the policyholder will have the coverage he needs. On the other hand, if the policyholder meets the term of life coverage and extends to another year, then the policy is often outdated. Thus, the life insurance coverage plans are operable when the policyholder has a ‘claim.’
As you can see life insurance, policy has nothing to offer in line of investment, thus if you are searching to invest in policies then you will need to consider the life assurance plans. Life Assurance is an investment value package, and the policy unites ‘guaranteed insurance” and ‘none guaranteed investment.’ If the policyholder takes out an assurance policy of 50,000 then the policies value is equal to the ‘guaranteed sum’ of the ‘policy.’
So, what is life assurance and why do people buy it? For that matter, what is the difference between life insurance and life assurance? The answers to these and many more questions can be found once we understand a little more of how things work.
Insurance is designed to provide compensation should you suffer a financial loss as a result of a given circumstance. For the purposes of these articles, I will focus on life insurance.
A few hundred years ago, a form of gambling was prevalent whereby one person ‘bet’ that another (usually famous) person would die within a given time frame. It does not take too much imagination to predict a dramatic increase in unexplained deaths if this practice were to be allowed to continue unchecked. For that reason, laws were introduced that forbade a person from benefiting from a life insurance policy unless they suffered a financial loss on the death of the insured person. The maximum insurance that could be paid out was limited to the loss incurred. These laws, fell under the general heading of ‘Insurable Interest’. Since their introduction a few centuries ago, these