Insurance and assurance both are financial terminology and services offered by companies. both the term will provide protection to people for their future happening. However, there are two differences between the Insurance & Assurance which are as follows.
- Insurance policy is refers to protection against an event that might happen whereas assurance policy is refers to protection against an event that will happen.This means that insurance policy is taken to prevent a risk or provide cover against a risk while assurance policy is taken against an event that is definite.
- Assurance policies are undertaken by people knowing that their death is certain. They keep on paying premiums knowing that their children will receive a big amount whenever they die. Company issuing assurance policy is assured of the death of the person and also that it has to pay the amount whenever the person dies. Because of this assurance factor, such a policy is called assurance policy.
In case of insurance policy, the company pays the amount to the dependents of the person if all the premiums have been paid on time and the person dies within the time period of the policy. In most of the cases, the person does not die within the term of the policy, hence it is called life insurance.