Life insurance and life assurance
Life insurance and life assurance are two financial products that provide financial protection in the event of the policyholder's death. While both products serve the same purpose, there are some key differences between the two.
Life insurance is a type of policy that pays out a lump sum of money to the policyholder's beneficiaries if the policyholder dies during the term of the policy. The policyholder pays a regular premium for the duration of the policy term, which can range from a few years to several decades. If the policyholder dies during the term of the policy, the beneficiaries receive a pay-out equal to the sum assured. If the policyholder does not die during the policy term, no pay-out is made.
Life assurance, is a type of policy that provides coverage for the policyholder's entire life, rather than for a specific term. As with life insurance, the policyholder pays a regular premium, but the policy does not have a fixed term. Instead, the policy provides coverage for the policyholder's entire life, and the pay-out is made to the beneficiaries when the policyholder dies, regardless of when that occurs. The pay-out amount is also usually higher than that of a life insurance policy and is based on actuarial calculations that take into account the policyholder's age and health at the time the policy is taken out.
In general, life insurance policies are designed to provide financial protection for a specific period of time, such as while a person has dependents who rely on their income. Life assurance policies, on the other hand, are more suitable for people who want to provide financial protection for their loved ones throughout their entire life, regardless of when they die.
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It's important to note that both life insurance and life assurance policies can be complex, and it's important to carefully review and understand the terms and conditions of any policy before making a purchase. It's also a good idea to consult with a financial advisor or insurance professional to ensure that you select the right type and amount of coverage for your specific requirements.
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