Life Insurance And Life Assurance Won't Be The Same!

The majority of people think that life assurance and insurance are one and the same, simply with different names. However, this is not the case at all. Each of them has an unique role and various advantages and disadvantages. So be sure to get the right one, the one that is actually the best option for you.

Life insurance coverage is for a selected period of time. Only if you perish during this period will the insurance company pay out the agreed upon amount of money. If however, you outlive the policy, it expires and has no value whatsoever. The only real time you get the benefit of a life insurance policy is when you claim.

Life assurance however is both a smart investment and insurance. The policy will pay out something which is equal to an agreed upon amount or the amount you have dedicated to it, whichever stands out as the highest in value at the time of the claim. The amount you have invested depends on how long you have had the policy and paid premiums and the insurance company's performance. Should you pass away whilst the policy is still in place, the insurance company pays out the higher value, if however, you outlive the policy, you will often get paid out even more due to being granted a terminal bonus (explained later).

Every year that the policy is in effect, the insurance carrier will add a bonus amount to the value of the policy, they will regularily add an additional bonus right at the end of the policy. What this means is that your life assurance policy increases each year. The amount that you are awarded is decided by the insurance company's performance in the investment sector. These bonuses can either be cashed in using the insurance company or sold to some other specialist investment broker.

There is also the option of whole life assurance. There is absolutely no deadline (excuse the pun) for these policies. They remain in effect for your entire life time and will pay out the amount agreed upon or the investment value at the end of your life.

It is best to consult with a specialist advisor (a registered financial advisor) before you go ahead and getting a life assurance or term life insurance policy to determine what will be most effective for you. For the elderly or people with high risk jobs, it may be more worthwhile to take out life insurance, whilst those who are relatively young and careful may benefit more from life assurance. It's all determined by what your lifestyle is and what your life expectancy is.

Life assurance also is frequently costlier than life insurance, but does pay out more when the policy expires than life insurance does. So take time to think for a while about it and choose the best option for you. Which one you choose depends on your income and preferences. I personally would take out life assurance, but that is just me, you decide for yourself.

For more information about life assurance or brokers visit the website http://www.insurance.co.za