In the financial world, there is a major difference between the terms “assurance” and “insurance.” However, the average person may assume that these two terms are synonymous. After all, they both sound similar! In fact, even Google compares the terms life assurance and life insurance as if they were the same thing. However, the truth is that these are two very different financial services. Here is a breakdown of the differences between assurance and insurance:
Assurance vs. Insurance
Both assurance and insurance provide financial coverage and support, but for different periods. While insurance is for a finite period of time, assurance is not. Assurance coverage is typically purchased for an event that is sure to happen- like death- whereas insurance is purchased for a set period of time. While the difference between assurance and insurance is subtle, it’s also very important.
Life assurance vs. Life insurance
The best way to explain the difference between assurance and insurance is through life coverage. Life insurance provides life coverage for a certain period of time. For example, if the life coverage is for five years, then it will only cover financials for that period of time. If the person dies when the policy is active (i.e. within the five years), your life insurance beneficiaries will receive a tax-free sum of money from the insurance company. However, if you live through this policy, they will not receive the money. Very few people understand this “catch” regarding life insurance.
With life assurance, you are covered all the way until death. This means that, regardless of when the policyholder passes away, their beneficiaries will receive a payment. There are many reasons why life assurance is more beneficial than life insurance. It provides more comfort and reassurance than most life insurance policies.
At TAT Accountant, we provide a variety of financial services including life assurance. We specialise in accounting and financial services for business owners and take our job very seriously. Not only do we aim to provide the highest level of service possible, but we want our clients to be informed about their policies.
Any company can convince someone to sign a piece of paper. However, at TAT Accountant, we want our clients to do so confidently, knowing that they are in good hands. Unlike other accounting and financial services companies, we care more about our clients than about the money. If you are still confused about the difference between life insurance and life assurance- or if you have any other questions regarding our financial services- please feel free to contact us at any time.
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With over 23 years of unwavering expertise, I am a seasoned Chartered Accountant committed to financial excellence. My journey in the realm of finance has been marked by astute strategic insights, meticulous attention to detail, and an unyielding dedication to precision. Over the years, I’ve navigated the complexities of financial landscapes, providing invaluable counsel to diverse clients. My proficiency extends across auditing, taxation, and financial management, coupled with a profound understanding of regulatory frameworks. As a registered professional, I have consistently upheld the highest standards of integrity and ethics, earning a reputation as a trusted advisor in the dynamic world of finance.