Are you confused between life insurance and life assurance policy? If the answer is in affirmative then maybe you should read what is written in the next few lines as it might help you in understanding the difference between life insurance and life assurance.
A life insurance policy is supposedly an agreement between the insurer and the policy holder. According to this agreement the insurer agrees to pay a lump sum amount to the family of the policy holder in case he or she dies or suffers from terminal or critical illness. In exchange the policy holder has to pay a fixed amount of money to the insurer at regular intervals.
On the other hand a life assurance policy is contract signed between the insurer and the policy holder with respect to an event which is sure to happen in the near future. The person who is insured is known as life assured. Many life insurance companies in United Kingdom happen to offer both the kinds of policies which often confuse the common man about their role. The role of both policies is to pay a lump sum amount of money to the bereaved family as the only difference lies in the fact that in life insurance it is never confirmed that the event will take place and in life assurance the event is bound to take place.
Often people, who somehow manage to know about events which might happen, take a chance and insure themselves with the life assurance policy. Though it is impossible that the future can be known but it is a risk which people tend to take.
The life insurance policy on the other hand is not a risk as it provides a support, though financial, to the suffering family. Hence everyone is advised to opt for a life insurance policy which suits their needs best.
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