Insurance - Assurance

You may be wondering why the term “insurance” is used on some occasions and at other times “assurance” is used. As mentioned earlier, there are two major divisions of insurance: one is life insurance and the other is non-life insurance.

“Assurance” is a term used in life insurance where a payment is assured either by way of a death benefit or by way of a maturity benefit. In general insurance there is no such guarantee. A benefit is paid only in the event of a loss and that too will be compensation to the extent of the loss. Here the term “insurance” is used.

Consequently in life insurance policies you will come across “sum assured” (insured sum), “life assured” (person whose life is under life cover) etc. In general insurance it is “insured sum” and “insured life” etc.