Cheap Life Insurance 1

You will probably have noticed this type of insurance variously described as life insurance or life assurance and you might have wondered why. The reason for the distinction - which these days is often blurred - arises from the fact that insurance is about the risk of something happening. Death, on the other hand, is the one certainty that all of us can count on as happening at some time. The description life assurance, therefore, was coined for the contract under which a life assurance company agreed to pay out an assured sum on the policyowner holder's death.


Most people who are married or who have any dependents would be horrified by the thought of their untimely death leaving their relatives with hefty bills to pay, an outstanding mortgage to struggle to meet, or a sudden decline in their standard of living. Life assurance - which guarantees an agreed lump sum benefit in the event of the policyowner holder's death - is designed to take the sting out of such worries.
Suffice it to say that the terms assurance and insurance are, in common usage, practically interchangeable. As noted, whole-of-life assurance will always pay out, so its premiums tend to be higher than standard term life assurance. Whole-of-life cover is also generally packaged with an investment plan, designed to enhance the final payout, and this increases the price of the premiums.
To add a little more confusion to the picture, most of this type of product sold today takes the form of term life assurance. With term life, cover is extended for a predetermined number of years and if the policyowner holder dies within that period, the assured lump sum is indeed paid. If the policyowner holder survives the agreed term, however, then no benefit at all is paid. It could be argued that this arrangement is indeed life insurance, since the risk is being taken whether or not the policyowner holder will die within the term of the policyowner. Purists might argue, therefore, that the label "life assurance" should be reserved for something called whole-of-life assurance which pays a lump sum to the policyowner holder's beneficiaries at whatever time death occurs.