What does life assurance cover?
What is life assurance? Like life insurance, life assurance pays out a tax-free sum to whoever you choose when you die. However, life assurance usually covers the policyholder for their entire life – so it's also known as 'whole of life' cover.
What is the meaning of life assurance?
Life assurance = An agreement between a life assurance company and a policyholder; in return for a payment (premium) from the policyholder, the company commits to pay someone or something (the beneficiary) upon the death of the person whose life is being covered (the life assured).
What's the difference between assurance and insurance?
Assurance is something which is 'assured' (or guaranteed) to happen, in this case when you pass away. A life assurance plan therefore pays out 'when' you die, rather than 'if' you die. Insurance is based on something which might happen (again you passing away), during a specific time period (or term).
Do you need life assurance?
If you have loved ones in your life that rely on your income, such as a partner or relatives, it is highly recommended that you take out a life insurance policy. Your life insurance policy can work to replace your financial contributions to their life or to ensure that your debts don't fall onto your loved ones.