Life Insurance Vs Life Assurance

By Ruchi Gohri
  | Published: 26 October 2021

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Most people think that life insurance and life assurance are the same kinds of insurance policies. And the names of both the policies also suggest the same. But to make the right financial decision, one must know the difference between these two types of insurance policies. 

Although both these insurance policies offer different kinds of insurance coverage, they both look after your family members in the event of your untimely demise. Let us go ahead and learn what these insurance policies are and how they work for the policyholders.

What is Life Insurance?

Life insurance is an insurance policy that provides a sum assured to the beneficiary in the event of the policyholder’s untimely demise. The insurance companies in the UAE offer different types of life insurance policies for their customers.

  1. Whole Life Insurance
  2. Endowment Life Insurance 
  3. Term Life Insurance
  4. Unit Linked Insurance Plan
  5. Money-Back Life Insurance
  6. Pension Retirement Plan

In return for the sum assured, the insured needs to pay insurance premiums monthly, quarterly, or yearly based on his/her financial convenience. With a suitable life insurance policy in place, the policyholders can secure the financial future of their family members and enable them to maintain their standard of living even when they are not around to provide for them.

Life insurance policies in the UAE offer a wide range of benefits such as death benefit, guaranteed income, health expenses cover, add-on riders, and much more for the policyholders. In addition, they get multiple payment methods and they can choose the one that caters to their financial needs. 

What is Life Assurance?

Life Assurance is a kind of whole life insurance policy for the policyholders. With this life insurance plan, the policyholders need to make continuous premium payments until the day they die, which may not be the best investment option. The life assurance plans offer indefinite coverage for the policyholders. As the name suggests, the insurer gives the assurance that the beneficiaries will get an assured claim amount regardless of when the policyholder dies.

Additionally, the premium amount for these life insurance plans is a lot more expensive in comparison to regular life insurance plans. The policyholders can also stop paying the premiums after reaching a certain age point, and they still get the payout. But they need to check with their insurer if they are offering this clause in the provided life assurance policy. 

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Life Insurance vs. Life Assurance

Both Life Insurance and Life Assurance Policies offer peace of mind by providing death benefits to the policyholders. This amount can be used by their family members to pay off debts, including credit card bills, loans, EMIs, etc. It can also be used for other daily expenses. 

Here are a few major differences between Life Insurance and Life Assurance Policies.

Term of Coverage

A life insurance policy covers the insured for a set term, and the policyholders can choose for how long they want to stay covered. However, if they die outside the term of the insurance policy, they will not get any payout even if they have paid premiums for years. On the other hand, a life assurance plan covers policyholders for their whole life and provides a guaranteed sum assured to the beneficiaries.

Premium Amount

Life insurance plans come with a reasonable amount of insurance premiums based on the sum assured and the policy term chosen by the policyholder. On the other hand, life assurance plan premiums are higher as they offer lifetime coverage. The premium amount for both the insurance plans depends upon the age, lifestyle and medical condition of the policyholder. For example, a young smoker will pay a higher premium amount than a non-smoker of the same age.

Investment Element

Life insurance plans offer no investment elements for the policyholders. On the other hand, with life assurance policies, the policyholders can easily link their investment products.

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Which One to Choose - Life Insurance & Life Assurance?

Deciding whether to choose a life insurance or life assurance policy is quite difficult as both insurance policies are valuable securities. A life insurance policy is a good option for those who are sole earners in the family and want to secure their family’s future in case of their unfortunate demise. 

Life assurance, on the other hand, is a good option for those who want to make an investment for future financial goals. The sum assured of the insurance premiums paid gets transferred to the beneficiaries and they can then use it to pay any expenses or debts. 

Ultimately, you need to make a choice and if you need any further assistance, you can contact our support team anytime. Our financial experts will analyse your needs and suggest the best suitable option accordingly.

Ruchi Gohri
Ruchi Gohri0 Post

Senior Content Writer | She has a penchant for writing and with over 5 years of experience, she plays around with words elegantly, crafting simple content for all to read. In her free time, she loves her couch either to read or catch on to her sleep.