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Life Insurance 101 - Insurance vs Assurance - Part 3 of 3


Like the I.T. field, the Investment field is also using technical terms. Either, they wanted to sound cool or pique the customer's interests, it all depends on the context of the message if it is appropriate to use jargon or not.

Life Insurance 101 - Insurance vs Assurance - Part 3
"family-health-hands-security-human" by geralt is licensed under CC0

Difference Between the Two?


Insurance
is defined as a form of payment when something happens to the insured. Take for example, a disability insurance. There is a big possibility that you will go through life without being disabled. Thus, this kind of insurance will not give you the disability benefit as long as you are "able". Not unless, if it was part of the policy that you will get your payment premiums once you reached a certain age without any disability.

Assurance
is defined as a form of payment given to the assured if a certain event will happen. Take for example, our mortality (death). Life Assurance is a 100% guaranteed payment, for an event that will eventually happen to all of us.


Why Bother with the Jargon?


Both of them are used in the financial industry and these two terms are used mostly interchangeably. Some companies uses assurance to their life products while others uses insurance. You, as a client must always read the fine print of the policy to make sure you that you are investing in the right investment vehicle. Because quitting from your policy will not give you any guarantee that you will get your premium payments back.



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We live in a much better time that we can at least prepare financially for the uncertainties of tomorrow. Take advantage of it.











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