Life Assurance Cover

The Basics of Life Assurance Cover

It is easy to get perplexed when it comes to the terms life insurance and life assurance cover as sometimes these words are used interchangeably. Both are worthwhile investments that provide policy holders with a substantial sense of security but they are two different products.

Assurance versus Insurance

Life insurance is a coverage designed to provide protection for an event that might happen whilst life assurance cover protects against a situation that is guaranteed to happen.

Life assurance always pays out regardless of whether you die or not. It is both a life cover and an investment, meaning there is a death benefit involved plus a cash value. If the policy holder should pass away, beneficiaries will be awarded the death benefit or the value that the investment has accrued, whichever is the larger amount. Should the policy holder survive, there will be an even greater payout as you get the cash value plus a terminal bonus.

As opposed to life assurance cover, life insurance typically pays out only when the insured dies within the policy’s term. If the insured person survives, no death benefit is received and at the end of the term, the policy expires.

When to Buy Life Assurance

Life assurance is a good idea if you plan on having protection for a long period of time. It is also a good option for people who want the combined advantage of insurance and investment. Because of the potential of the investment portion to accrue a huge amount of money, this can be used as an additional retirement fund or something that your children can inherit once you pass away.

Additionally, once the investment portion of your policy has started earning, you can cash it in with your insurance provider or with a specialist investment broker. It should be noted however that you will most likely be charged a penalty for early cash-in.

Tips for Getting a Good Deal

There are ways that you can save on your life assurance cover if you know how and where to look. Compare life assurance quotes from at least five different companies so you have enough offers to evaluate. The insurance industry is quite competitive and adequate comparison shopping usually yields many good deals.

It is also a good idea to obtain online life assurance quotes as online firms offer some of the lowest rates in the market. You can also ask your relatives and friends for recommendation as they will usually have a list of companies offering the best deals.