Life Assurance and Life Insurance – Knowing the Difference
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by: alicecristofoli0
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Word Count: 543
Date: Wed, 12 Oct 2011 Time: 5:52 AM
Many people aren't aware that there's a difference between life insurance and life assurance at all and some sources online will even tell you that the words are synonyms. This is not the case however, and in fact life assurance is a distinct product to life insurance – a specific kind of life insurance that has particular benefits. If you're looking for ways of investing money, while at the same time providing for your family in the unfortunate event that you should leave them... then life assurance can provide you with just that. When you compare life insurance online, then some companies will offer this as an alternative, so it's useful to understand it.
How Life Assurance is Different from Life Insurance
Most people by now know what life insurance is. Life insurance is a way to provide financial security for your family in case you pass away early. Here you pay into the insurance policy on a monthly basis, and as a result they agree to pay out if you die – providing your family with either a lump sum, monthly payments or both depending on your policy. This then ensures that they don't have to sell their home, get a Nanny or take on extra work and it's very important if you have children relying on you financially.
Life assurance does the same thing – you pay in monthly and it pays out if you die or at the end of term (in 'fixed term' insurance you get a payout after a certain period even if you aren't forced to use it). At the same time though life assurance is one of the best ways of investing money. The reason for this is that as well as providing you with cover, your life assurance policy will invest money from your rate into stocks, shares and other things and this means that they increase the value of what you've given them. It's one of the best ways of investing money because they then add a percentage of this interest they've earned onto the value of your life assurance plan. You will get a single guaranteed amount that you agree up front (meaning you don't end up with nothing as you can in some other ways of investing money) but on top of this when the life assurance plan pays out you will also get some additional money in the form of the interest which might be a nice little bonus or might be a big lump. And in the meantime some life assurance policies will even pay out additional bonus at times like investing money in bonds.
Smart Investing With Life Assurance
The reason this is so smart is because you need to take out life insurance one way or another if you are supporting a family. However at the same time by taking out life assurance you can make sure that this isn't money down the drain and you can still grow that money.
The best way to use life assurance is to take out a fixed-term policy. This is a smart move and one of the best ways of investing money because it means that you don't have to die to get your payout and to get some interest back on your investment.
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Visit the links to compare life insurance. Remember to look into this form of life insurance Canada as well to help improve your finances.
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