Differences between life insurance and life assurance
According to Aviva, Life insurance and life assurance are both types of protection created to give money to the selected individual or company after the policyholder passes away. However, there are some key differences. Life insurance usually only covers the policyholder for a specific period of time, whereas life assurance usually has the policyholder covered for the duration of their entire life.
Normally, life insurance gives an amount of tax- free money to whoever is chosen if the policyholder dies during the specified period of time. There are three different types of life insurance: level, increasing, and decreasing cover. The different types of cover basically do as they say, level cover gives the same amount of cover for the duration of the term, increasing cover means the amount goes up during the term (in accordance with inflation), and decreasing cover means the cover goes down during the term (goes in accordance with mortgage pay offs and other loans).
Life insurance policies can be chosen whether cover wants to increase, decrease or stay the same.
On the other hand, life assurance is similar to life insurance but covers the policyholder for their entire life. As death is guaranteed, money given is also guaranteed, which means that the premiums for life assurance can be higher than life insurance.
With the policies of life assurance, the choice to increase cover can be chosen but cannot be decreased. However, there is peace of mind knowing there is cover for the entire life.