The difference between life insurance and life assurance? – Aviva
What is the difference between life insurance and life assurance
life insurance and life insurance are terms that are often used interchangeably, but is there a difference?
Both are forms of protection designed to pay after the policyholder dies, but they don’t work the same way. The key difference is that life insurance is designed to cover the policyholder for a specific period of time, while life insurance generally covers the policyholder for their entire lifetime.
what is life insurance?
Life insurance pays a tax-free sum to whomever you choose if you die during the term of the policy. the most common types of life insurance are: level, increasing and decreasing coverage.
Life insurance covers you for a specific term or amount of time. this is often the same amount of time as your mortgage, for example. You will pay a premium for the term of your policy and will be covered if you die during that term.
Different types of lids pretty much do what they say on the tin. tier coverage gives you the same amount of coverage throughout the term of the policy, while the amount of coverage you have increases with increasing coverage (to account for inflation) and decreases with decreasing coverage (to account for the fact that you have hopefully paid more and more on your mortgage or other loan).
You can choose a product based on whether you want your coverage to increase, decrease or stay the same. if you choose to increase coverage, your premiums will also increase. That might help you determine which of these types of life insurance is best for your circumstances. remember, you will only be covered for policy term 1.
Do you find life insurance terms difficult to understand? Take a look at our life insurance glossary.
what is life insurance?
Like life insurance, life insurance pays a tax-free amount to whomever you choose when you die. however, life insurance generally covers the policyholder for their entire lifetime, which is why it is also known as “whole life” coverage. Unfortunately, death is one of life’s certainties, so a payout is guaranteed, which means life insurance policy premiums tend to be higher than life insurance policies. /p>
With life insurance policies, your coverage can go up if you want, but not go down, and even though your premium will likely be higher, you have peace of mind knowing you have coverage for your whole life.
which one is right for me?
The right coverage for you depends on your circumstances, of course, but you can think about the differences between the two to help you make a decision.
For example, if you want the peace of mind that your mortgage will be covered in the event of your death, but believe you don’t need life coverage after your mortgage is paid off, you may want to consider a life insurance policy. . however, if you want to know that a lump sum will be paid to your loved ones no matter when you pass away, you may want to consider a life insurance policy.
We currently offer a term life insurance policy, our life insurance plan. If you think life insurance might be right for you, we also offer a whole life plan: our 50+ Life Insurance 2.
