What is life assurance?

Life Assurance is also known as  life insurance and it is a contract between an insured  and an insurer, where the insurer promises to pay a designated beneficiary a sum of money also known as benefits upon the death of the insured person. Life assurance has an investment that is involved in it but life insurance does not.

Differences between life Insurance and life assurance
There is a slight difference between life assurance and life insurance and I have discussed as follows:

Life Insurance insures you for a specific period of time. If death occurs while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term, the policy is finished and has no remaining value  owed whatsoever. Even while the Life Insurance policy is in place, it only has a value if you have a claim; this means it is just like a home insurance.

Life Assurance – With Life Assurance you have an important investment goal. A Life Assurance policy joins a guaranteed insured sum with a none guaranteed investment, the value of the investment is directly related to the size of the guaranteed sum on your insurance policy, the number of years the policy has been in force and Insurance Company’s investment performance.

If one is to die during a Life Assurance policy’s term, the policy pays out the guaranteed sum (just as with Life Insurance) or the value of the annual investment bonuses that had been added to the policy by the Insurance Company to date, whichever with a larger value. As time goes by within the life assurance policy, the Life Assurance policy increases in value as the bonuses attached to it, build up.

If one does not die and survives to the end of the policy, the investment value is increased. One then gets the annual bonuses plus a terminal bonus.

When a Life Assurance policy has earned an investment value via its annual bonuses, one can cash it in with the insurance company. However, most people get a far higher price for their policy by selling it to a specialist investment broker.

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