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Insurance vs Assurance: Know Major Differences Between Insurance & Assurance 
Take informed decisions with IIFL Insurance:

How are Insurance and Assurance different?

Insurance companies use various terms while selling plans to customers in the markets, and not everyone is aware of them properly. Those willing to buy a new insurance plan should know more about the terminologies utilized by an insurer in detail. This, in turn, gives ways to meet exact needs in the claim process to ensure peace of mind. Not only that, one can get more clear ideas about a plan before investing money. Choosing the correct type of plan allows policyholders to provide financial protection to their families and children during unforeseen events in life.

Nowadays, insurers offer various types of life insurance and health insurance policies for policy buyers to address their needs. However, they need complete evaluation because the coverage policies may vary from one insurer to another insurer. Therefore, it is wise to select a plan after knowing the features and other things in detail. Moreover, policy buyers should focus more on their objectives when purchasing a policy from the markets. They must know the difference between insurance and assurance in a policy with more attention. This will help a lot accomplish goals in the coverage process to claim amounts easily. 

What is insurance in a policy? 

Insurance is a policy that refers to an agreement or contract where an insurer pays an amount to insured persons for the loss or damages caused due to uncertain incidents. For example, health insurance plans, personal accident cover plans come with sum insured amounts that offer compensation for medical expenses, critical illnesses, physical disabilities caused by injuries, and accidental death benefits. At the same time, the contract will become void when a policyholder survives during the policy when it comes to death coverage. A policyholder can choose the sum insured amount based on his/her needs and other things. This will help to pay the premium amounts on time to get the benefits. An insurance company will pay the amounts for losses in exchange for a premium. Sum insured plans don’t provide maturity benefits to a policyholder. 

What is assurance in a policy?

A policy buyer should know what assurance is while selecting a plan. It means an insurer agrees to pay amounts for policyholders in case of death or disability. It works on the certainty principles allowing a person to claim amounts as soon as possible. For instance, whole life insurance plans provide both maturity benefits and insurance coverage for a policyholder. Apart from that, they even come with investment options that provide ways to earn a consistent income. At the same time, the duration of assurance is longer when compared to insured plans. Understanding the assurance meaning enables a policy buyer to make the right decision in the insurance buying process.

9 Major Difference Between Insurance and Assurance 

  • Objective: The objective of insurance is to reinstate the financial stability of a policyholder during untoward incidents. In addition, assurance aims at offering coverage for people when the event takes place. 
  • Type: Insurance coverage is available in health insurance, motor insurance, personal accident cover, and liability insurance plans. In addition, life insurance plans, endowment plans, and annuity plans include assurance coverage for policyholders to gain more advantages. 
  • Claim Process: Insurance plans that come with sum insured pay compensation only on the happening of an uncertain event. At the same time, assured plans provide claim amounts either in the event of happening or at the time of maturity. 
  • Coverage: Coverage is available only for various risks caused by unforeseen events that will help overcome financial losses. However, assurance plans offer coverage for an actual event such as death or disability. 
  • Investment Options: Sum insured plans don’t provide the investment facilities to generate a bonus. But, on the other hand, the assured plans provide an opportunity for insurers to invest money in financial instruments to earn returns which are distributed as bonuses. 
  • A number of claims: The sum insured plans offer multiple claims when compared to the sum assured plans, thereby showing ways to reduce the financial burden significantly. 
  • Renewability: Policyholders can renew their sum insured plans depending on their needs and other things to continue the benefits. On the other hand, assured plans are one-time investments, and policyholders cannot renew them. 
  • Duration: The duration of sum insured plans is short and assured plans have a long duration for coverage. 
  • Maturity benefit: The sum insured plans don’t come with a maturity benefit, whereas assurance plans cover maturity benefits to policyholders. 

How to choose an insurance plan?

Most insurance plans come with insurance and assurance coverage that cater to the requirements of policy buyers. However, customers should evaluate them with more attention to determine which one is the best. It is wise to read reviews of plans online before buying them. The difference between insurance and assurance allows a policy buyer to proceed further while purchasing a plan. Besides that, it gives ways to select a plan with the best insured and assured amounts for the future life.

How to calculate the sum insured and sum assured premium amount?

Those who want to calculate the sum insured and sum assured premiums should consider using an online tool for meeting the essential needs. They have to enter the age, income, the number of dependents and other necessary details to know the premium prices. This is because they will play an essential role in influencing the rates, and policy buyers should give more importance to them.

Where to get the best insurance plans?

Policy buyers should know which is better assurance vs. insurance after consulting with financial experts. Most insurance companies offer quotes for customers, and they can compare them online to choose a plan accordingly. Moreover, they allow buyers to know more details of plans with highly qualified teams. The sum insured plans are ideal for managing problems during emergencies such as hospitalization, critical illnesses, and disability. Anyone who wants coverage and investment opportunities can pick sum assured plans to earn a good income. A person should follow the terms and conditions while purchasing an insurance plan from a company that will help minimize disputes.

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