What is the difference from life INSURANCE and life ASSURANCE

Me and my partner both have life assurance at the moment and we are paying about 60 pounds a month for this.My partner was talking with a friend about life insurance and his friend is paying about 16 pounds a month for life insurance. I have a 9 month old baby and every penny counts.Could someone help me please??? Thank you:think:

Comments

  • Quentin
    Quentin Posts: 40,405 Forumite
    edited 27 December 2012 at 2:03PM
    Your "assurance" will pay out whenever you die. It is assured. Your premium will include an element of investment which will result in a lump sum when your policy matures or if you die earlier.

    "Insurance" pays out only if you die during the specified period of the policy. (eg an insurance policy might have you insured if you die before you reach 65 - if you live to be 65 then there is no payout on your eventual demise)
  • dunstonh
    dunstonh Posts: 119,385 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    There is a debate on the actual differences with no hard and fast rule. Assurance is used to cover an event that will happen. Insurance is to cover an event that could happen.

    In the UK, life assurance was the term used for full underwritten plans that would pay out on death (as death will happen). Insurance was used for plans with clauses that may pay out on death (over 50s plans for example). What has happened over the last decade is that there has been some dumbing down by certain retailers to call their life assurance plans life insurance. Dumbing down in my opinion. Some may say it is just trying to make things easier by standardising it with other countries. Some may say that as death is not assured during the policy term (assuming term assurance) then assurance should not be used on that type of plan and its correcting an original error to call them assurance in the first place.

    As long as you go for a fully underwritten life assurance/insurance plan and not one of these cut down accidental death, over 50s or similar rubbish plans then you should be fine.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • kingstreet
    kingstreet Posts: 39,230 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Arijha wrote: »
    Me and my partner both have life assurance at the moment and we are paying about 60 pounds a month for this.My partner was talking with a friend about life insurance and his friend is paying about 16 pounds a month for life insurance. I have a 9 month old baby and every penny counts.Could someone help me please??? Thank you:think:
    Are you sure it's only life cover?

    At that cost, it may have other cover, such as cover for a critical illness built-in. You need to ensure you are comparing like with like.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    Arijha wrote: »
    Me and my partner both have life assurance at the moment and we are paying about 60 pounds a month for this.My partner was talking with a friend about life insurance and his friend is paying about 16 pounds a month for life insurance. I have a 9 month old baby and every penny counts.Could someone help me please??? Thank you:think:
    and...I only pay £5 a month for life insurance. As has been posted you have no idea what the policy covers. Mine only covers death and pays out about £60,000 and if I live for 10 years the policy ends and I get nothing.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • dwsjarcmcd
    dwsjarcmcd Posts: 1,857 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    In the context you quote, there is no difference between Life Insurance and Life Assurance. As has been mentioned, the difference could be about age, whether you smoke, whether its critical illness etc.
  • System
    System Posts: 178,315 Community Admin
    10,000 Posts Photogenic Name Dropper
    So people with bad motor insurance risks need car assurance? :)
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • kingstreet
    kingstreet Posts: 39,230 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    So people with bad motor insurance risks need car assurance? :)
    No. There is no guarantee you will have an accident.

    There is an assurance you will die. Only the date is variable/unknown.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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