Life Insurance vs Life Assurance

Lots of us get confused between “life insurance” and “life assurance”, and we can see why as the words look similar and sound even more alike. Let us try to clear a few things up by explaining the main differences between them as simply as possible.

Life insurance covers you for a set timeframe but is only payable by your insurance company if you die while the policy is active. So, if you outlive the policy term, no pay out is made. Monthly repayments on life insurance are calculated based on your age as well as the more variable factors of health and lifestyle.

On the other hand, life assurance is seen as more of an “investment” in that it pays out a specific lumpsum along with yearly investment bonuses (which are not guaranteed) that are based on the pre-defined lumpsum amount and the policy term, amongst other factors. If you die while the life assurance policy is active, your insurance company pays out the larger amount of the pre-defined lumpsum or the proceeds of your investment at that time. If you outlive the policy term, the proceeds of your investment will of course be higher in that your insurance company pays what’s called a “terminal bonus” as well as the yearly investment bonuses. In this case, life assurance policies may be cashed in. “Whole of Life” assurance policies are available on the market.

If you need a financial advisor in Munster or surrounding area to help you see the wood from the trees in the complicated life cover, mortgage cover, pensions and investments and savings market Murnane Financial would be delighted to help! Get in touch with us now here.