Life insurance or assurance is used to protect the financial security of the people you love most. Insurance companies offer a variety of products, which include Health Insurance that takes care of your medical expenses, Term Life Insurance, which offers financial protection for a limited period, Whole Life Insurance that provides coverage for your entire life, etc. To get a maximum benefit form the insurance policy we opt for, we need to know the difference between insurance and assurance.

Of late, the distinction between the two terms has become vague. This is because of companies offering both types of policy, under the single banner titled insurance. A globally accepted difference between “insurance and assurance” is that insurance refers to providing cover for an event that could happen whereas “assurance” is providing the cover for an event that is certain to happen. A whole life insurance policy that covers death is assured to make a payment. The policy offers assurance on death; even if the policy has a prescribed termination date the policy is still assured to pay on death and therefore is an assurance policy. Whereas an accidental death policy is not assured to pay on death as the life insured may not die through an accident; therefore it is an insurance policy.

If unable to decide which sort of policy you are in need of it is better to consult an independent financial advisor who can do the calculations for you and show you the cost/benefits of each alternative scheme. A recent research shows that there is a mutual distrust between insurance companies and customers. Customers think that insurers will do every possible thing that they can to get out of paying a claim, and insurers think that customers will do all that they can to get money form the company.

Hence, it is wise to opt for assurance policies if you are determined to provide a life time financial security to your beloved ones.