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Insurance or Assurance - Do You Need Reassurance?
Insurance versus assurance: what is the difference?
Should you care?
The world of finance is extremely complicated and there are many factors to consider when choosing any financial protection product.
When looking for a policy you need to know what you are looking for and what is on offer in order that you get the right cover for your needs.
One thing that many people find confusing is the specific use of the term "insurance" and the use of "assurance". What are the differences between them?
In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.
For the purposes of financial provisions, a life insurance policy provides cover for a set period of time. If the worst were to happen during that time (and there are no complications), then the insurance company will be required to pay out the agreed sum to the beneficiary. The only time the policy has any real monetary value is if there is a claim made for payment as a result of an event triggering that claim, such as the death of the person covered. If the person outlives the term of the policy, then the insurance policy will cease and no payment will be made.
Life assurance is different from insurance, and will always result in a payment. This is achieved by combining an investment element along with and an insured sum. This means that over time the value of the policy can increase as the investment bonuses are added. If a person covered by life assurance were to die, then the insured sum would be paid out, alongside the investment bonuses which would have accrued over time. If it is necessary to cancel the policy prior to the end of any designated term period, or the death of the life being covered, then once an investment bonus has been added, the life assurance policy will have an encashment value. It is therefore possible to cash in a policy earlier than its usual termination date, in order to collect on the investment portion. It should be noted that many insurance companies place penalties for cashing in policies early.
The distinction between the two terms has become increasingly blurred. This is principally due to many companies offering both types of policy and grouping insurance and assurance titles in similar contexts, sometimes interchanging the two terms. Richard Brown, Chief Executive of Moneynet.co.uk, clarified the situation by stating, "most life insurance companies offer a wide range of insurance and investment services - for example pension, investment funds, investment bonds, car insurance, home & contents insurance, life assurance, and even loans. Sometimes a 'life insurance' company will call itself a 'life assurance' company but they mean one and the same."
More companies within the financial services industry have realised that consumers are becoming increasingly baffled by the choice of financial products available. Although this confusion has resulted in a certain amount of apathy, many firms are resolving the situation by providing comprehensive information guides. This has lead to an increase in the number of the online financial guides and glossaries that have become available.
Sites such as Moneynet, Moneyfacts, and MoneyExtra not only provide comparisons of financial products, but also information to help consumers make informed decisions. With organisations like Which? writing publications such as 'Be Your Own Financial Adviser', the focus has turned to providing consumers with sufficient information to make their own financial judgements.
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Insurance - Google News
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Do You Pay Too Much For Your Car Insurance?
Do the premiums just seem to get higher and higher every year?It is amazing how many people just receive their insurance renewal when it is sent out each year and pay it off without a second thought!But, at the back of their mind, is this niggling feeling of discontent about the amount they are paying. Unfortunately many feel there is nothing they can do about it, they are literally being held to ransom by the insurance companies.
Long Term Care Insurance
Long Term Care Insurance is needed in the event that a person becomes physically disabled, terminally or chronically ill. Healthcare will pay for doctor bills, hospital bills and some prescriptions, but healthcare will not pay for nursing home care or in-home nursing care.
Flat Insurance in the UK
What are the factors involved in flat insurance? Do I need to provide both buildings and contents cover? Who will cover shared flats or flats with student tenants?The responsibility to insure the building fabric of a flat lies with the freeholder. This means that if you own your flat on a leasehold basis then you only need to insure the contents.
Insurance Credit Scoring: An Ethical Issue
The issue at hand is the use of a consumer's credit score as an underwriting tool for auto insurance rates. What is a credit score or FICO score? A FICO score is a credit score developed by Fair Isaac & Co.
Protecting Your Expatriate Family
If you and your family relocate overseas, one of your first priorities from a financial planning point of view may very well be establishing health care.Costs and services abroad can differ greatly to what you are accustomed to 'back home'.
Term Life Insurance Help
Life insurance can be a very scary thing. If you buy insurance when you're 30, but don't die until you're 90, chances are you're going to come out on the loosing end of insurance.
The Immorality of Guarantee Issue Health Insurance
While there are genuine debates about whether privatized health insurance or nationalized health insurance policies make more sense, there can be little doubt that guarantee issue policies represent the most immoral type of hybrid between the two. The argument that everyone should be covered by health insurance is an argument for a nationalized health care policy.
Finding California High Risk Truck Insurance
California high risk truck insuranceIf your are in need of California high risk truck insurance there's an easy way for you to find it. Fortunately with the advent of the internet and database development in the auto industry you shouldn't have any difficulty with California high risk truck insurance.
Is Your Financial Security at Risk?
The topic of insurance is not sexy by any means. Perhaps that's why so many people avoid addressing it.
Auto Insurance Basics
Most people only think that insurance is something they need so they can get their registration and tag so they can drive. It is something that they need because their license will be suspended if they don't get it.
UK Young Driver Motor Insurance - Build Your Own No Claims Bonus or Insure through Your Parents
For may young drivers, affording the costs of motor insurance is an issue. With first time insurance costs running to several thousands of pounds in some instances, it is no wonder that younger motorits are looking for ways to keep premiums down.
3 Important Moving Insurance Tips
Because of the many problems that can occur when you hire a moving company to transport your goods, the moving companies are required some basic insurance of your goods. Even with this basic insurance, purchasing additional coverage might be needed.
What You Need to Know About Auto Insurance
Let's be realistic, everyone needs to have auto insurance. Aside from the fact that almost every state requires it, it is only logical for a driver to see that his vehicle is properly insured.
Why Bother With Farmers Auto Insurance?
Farmers auto insurance is a very large insurance company that offers all types of coverage including car insurance. The insurance policies cover many things concerning insurance on vehicles.
Health Savings Account (HSA): Helpful for Older People?
The Health Savings Account (HSA) is an amazing tool that a lot of people have been talking about. It is meant to help you save money on insurance and make your life simpler, maybe even help you be healthier.
Family Health Insurance Plans - How to Find The Best Provider Online
Family health insurance plans typically need to offer more coverage than plans for an individual. Regular check-ups and occasional emergencies need to be covered, especially if you have children.
How Much Car Insurance Should You Buy?
Car insurance is one of the most dreaded chunks in your budget. And depending on which state you live in, it could be a smaller or larger chunk of your budget than your neighbors across state lines.
5 Strategies To Reduce Your Car Insurance Premiums
Your latest car insurance bill has arrived and it is not a pretty site. In fact, it is downright ugly! What can you do? Must you remain hostage to the ever spiraling rate increases foisted upon you when your policy renews? In a word, no.
Your Cars After-impact Diminished Value
The(ACV)Actual Cash Value Policy DOES NOT insure the property itself but the VALUE of the property.Okay let's say the insurance company chooses to "Repair" their insureds damaged property (as is their option within their contract of insurance).
Affordable Life Insurance!
So, you've decided to purchase life insurance. Well then, you have made a good decision! If you have dependents, you know that you must provide for them long after you are gone.
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