Many people think that Life Assurance and an online life insurance are the same things. However, this simply isn’t the case at all.
The Difference between Life Insurance and Assurance
Life insurance is a set amount of money that’s set aside for a certain person whenever the insured person dies. The insured person can also claim the money themselves if they live beyond a certain age. On the other hand, life assurance is a combination of insurance and an investment. Herein you’ll receive money that will be either equal to or more than the minimum amount that was underwritten by the policy’s clause or investment valuation. As such, your investment is actually reliant upon how the insurance company performs whenever it comes to investments and growth.
How this works is that every year the life insurance quotes company will add a bonus to the guaranteed value of your policy. There is also an additional bonus that you’ll receive at the end of the term, which is called a terminal bonus. So, as time goes by your policy will increase as investment bonuses continue to be added on to it. If you were to die during its term your beneficiary would receive either the guaranteed minimum sum or the annual investment bonuses’ accumulated value, whichever is actually higher (or more money).
To put this in even simpler terms, an insurance policy will cover the costs if something might happen to you while an assurance policy pays out if an event does happen. As such, an online life insurance policy is only going to last for a set amount of time and if the event occurs during that time, you’ll be paid, otherwise, you won’t be paid.
Benefits to Insurance Policies
One of the biggest reasons why people prefer life assurance over life insurance is that the cash is actually being invested, which means that it can make money for you. Of course, you don’t have any say in the investment portfolio as it’s left wholly in the hands of the insurance company. However, these are usually very conservative investments, meaning that you’ll probably earn less than if you were to do the investing yourself.
Receiving a Guaranteed Payout with a Life Assurance Policy
While an online life insurance policy won’t always pay out, a life assurance policy will generally pay out whenever you are 65-years-old or upon your death. This will help to guarantee that your family will not only be able to pay for your funeral but that they will also have some form of financial support available when needed. Payments are made every year upon the investment portion after the person turns 65. Until then the premium is invested upon your behalf. Clearly you can now see why these aren’t just used for insurance but also as a retirement savings account as well.
For Those Who Are In Need Of Money Now
Anyone who wants to cash in upon the investment portion of their life assurance policy before the time actually comes for them to do so will find that it’s something that they really can do. Unfortunately, they will be faced with really heavy penalties though. For this reason, it isn’t advisable for you to cash in early on your policy unless you really, truly need to do so.
Today the difference between the two types of policies are actually becoming more and more blurred. This is because both of them are being offered by a lot of different companies who are also adding additional features of one policy to another policy in order to make these policies look a lot more attractive. Of course, it’s still important for you, as a customer, to know what the differences are so that you will be able to ask for the right thing and so as to make sure that you are properly prepared for whatever the future may bring.
Hopefully this information will help to clear up things in regards to life assurance and online life insurance for you. This way you’ll know for sure which of them would be a better fit for you and what you are in need of. Only then will you be truly prepared for when you get older and are, unfortunately, nearing the end of your time here.