Nerdy Note: Assurance and Insurance

Former_MSE_Wendy

Why it's life assurance and not insurance?

A morbid one here. You insure something that may happen, you assure something that will happen.... and death certainly is assured.

Yet some policies only pay out if you die within a set time limit, and some argue these are therefore life insurance policies.

More information in the free Level Term Life Insurance and Mortgage Life Insurance

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cavim

When I studied for my insurance qualifications many moons ago, the correct term was "life assurance" and life cover for a specified term was then often known as "term life assurance".

I'd say that life assurance is still the correct term technically-speaking, but "life insurance" is no doubt more commonly used not just outside the insurance industry but also by people working in it.

So few people working in insurance study the subject these days, or receive more than the regulatory minimum technical training required, that few would know the correct term anyway! (It's all about sales & call centres staffed by low paid workers who are very often based offshore anyway!).

dunstonh

When I studied for my insurance qualifications many moons ago, the correct term was "life assurance" and life cover for a specified term was then often known as "term life assurance".

Correct. Life assurance is life assurance and never insurance irrespective of term or whole of life.

I think the articles should use the correct wording in level term assurance and mortgage decreasing term assurance and not try to create more confusion by attempting to be different.

MSE_Martin

Hi while i agree with you to an extent over 'correct' usage... sadly when people search on the site - they search for life insurance not assurance so using the 'correct term' would actually be an issue! (hence why the article uses both and explains it)

NatFeerick

Surely if you 'assure' an event that is inevitable - such as death (as per original nerdy note) then shouldn't it more accurately be called 'death assurance' - especially since the life 'event' is already underway?

But then it wouldn't sound so marketable, eh?

A.Jones

Isn't the only thing that life assurance assures is that, for the average person, you pay more than your family gets back?

dunstonh

A.Jones wrote: »

Isn't the only thing that life assurance assures is that, for the average person, you pay more than your family gets back?

For 4 out of 5 people that is correct. However for the 1 in 5 that will die before retirement, the benefits to the family outweight what is for most people a very small cost.

You just have to look at the consequences of not having life assurance if you have a family and/or mortgage.