The Basics of Life Assurance

Life assurance is an insurance product that provides guaranteed benefits – meaning, whether you live or die, you or your beneficiaries will receive the proceeds of the insurance.

If you die before the policy matures, your beneficiaries will receive the amount. If you outlive the policy (you are still alive at the time the policy matures), you will receive an endowment for a specified amount (plus any dividends).

The maturity date is either set after a certain number of years or when you reach a certain age. This makes life assurance ideal if you want to secure your retirement, your child’s education or if you simply want to have money when you reach a certain age.

The advantage of life assurance is that living or dying, you are assured of receiving something from the insurance coverage. This way, you can provide for your family in the event of your untimely death, or enjoy a lump sum you can spend however you will at the time the policy matures.

This is in contrast with other types of policies, where payment is based on the probability of something happening. For instance, your homeowner’s insurance will pay for damage caused by a fire if fire insurance coverage is included. If there is no such fire, or no covered event (theft, natural disasters, etc.) happens within the life of the policy, the insured does not receive anything. Life assurance, on the other hand, assures of payment.

Some Options

  • Premiums.

    Depending on how the policy is set up and when you bought it, you can either choose limited pay premiums or premiums payable for the entire life of the policy.

  • Coverage.

    You can also choose to have individual life coverage (for yourself) or get a joint life coverage (for both you and your spouse). There are types of life assurance policies that pay out on either the first death or the second death.

Some Life Assurance Products

  • Whole life policy.

    This policy has an open-ended coverage and will pay the sum insured upon your death. This is considered life assurance as the benefits are assured – regardless of your age at the time of death.

  • Term assurance.

    This provides coverage for a specific term and, when the term ends, there are some policies that pay out the interest earnings of the investment portion of the term life coverage. The investment part of this policy is used to build cash value.

  • Family income cover.

    Instead of a lump sum, a monthly payout is provided either to you or your dependents until such time that the coverage amount is fully paid out.

To protect your loved ones for less, fill the form on the right to get your life insurance quote.