Life Assurance vs Life Insurance
Life assurance often known as a whole of life policy is a type of insurance that continues indefinitely and pays out a lump sum once a policyholder dies (assuming they’ve met their monthly premiums).
The main difference between life assurance and life insurance is that life insurance covers you for a set term, whereas life assurance covers you for a whole life.
Who needs life assurance?
You may prefer to take out a life assurance policy if the security of a guaranteed payout is important to you.
While the premiums are usually higher, other policies do not offer 100% guarantee of a lump sum upon your death which can make it an attractive deal.
Definition of terms in life insurance /assurance
Sum assured – Sum payable by the insurance company incase of death or maturity of the policy to the beneficiary of the life policy.
Death benefit – amount payable by the insurance company to the beneficiary of the policy in case of death of the life assured while the policy is in force.
Premium– Amount paid by the life assured to the insurance company to secure the policy value, death benefit, face amount and or sum assured.
Rider – Additional benefits that complement the benefits under the main policy.
Accidental death – Loss of life due to accidental causes.
Policy term – Duration from the inception of a policy to the intended date of expiry ( maturity).
Premium term – Premium paying period.
Bonus – Addition to the sum assured, declared annually by the insurance company representing the excess of the actual investment return over the expected.
Cash value / Surrender Value –The amount payable on the termination of the policy before its maturity.
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