he world of finance is (and there are no complications),
extremely complicated and then the insurance company will
there are many factors to be required to pay out the agreed
consider when choosing any sum to the beneficiary. The only
financial protection product. time the policy has any real
monetary value is if there is a
When looking for a policy you claim made for payment as a
need to know what you are looking result of an event triggering
for and what is on offer in order that claim, such as the death of
that you get the right cover for the person covered. If the
your needs. person outlives the term of the
policy, then the insurance policy
One thing that many people find will cease and no payment will be
confusing is the specific use of made.
the term "insurance" and the use
of "assurance". What are the Life assurance is different from
differences between them? insurance, and will always result
in a payment. This is achieved
In general, the term insurance by combining an investment
refers to providing cover for an element along with and an insured
event that might happen while sum. This means that over time
assurance is the provision of the value of the policy can
cover for an event that is increase as the investment
certain to happen. bonuses are added. If a person
covered by life assurance were to
For the purposes of financial die, then the insured sum would
provisions, a life insurance be paid out, alongside the
policy provides cover for a set investment bonuses which would
period of time. If the worst have accrued over time. If it is
were to happen during that time necessary to cancel the policy
prior to the end of any bonds, car insurance, home &
designated term period, or the contents insurance, life
death of the life being covered, assurance, and even loans.
then once an investment bonus has Sometimes a ‘life insurance'
been added, the life assurance company will call itself a
policy will have an encashment ‘life assurance' company but
value. It is therefore possible they mean one and the same."
to cash in a policy earlier than
its usual termination date, in More companies within the
order to collect on the financial services industry have
investment portion. It should be realised that consumers are
noted that many insurance becoming increasingly baffled by
companies place penalties for the choice of financial products
cashing in policies early. available. Although this
confusion has resulted in a
The distinction between the two certain amount of apathy, many
terms has become increasingly firms are resolving the situation
blurred. This is principally due by providing comprehensive
to many companies offering both information guides. This has
types of policy and grouping lead to an increase in the number
insurance and assurance titles in of the online financial guides
similar contexts, sometimes and glossaries that have become
interchanging the two terms. available. Sites such as
Richard Brown, Chief Executive of http:www.Moneynet/ or
Moneynet.co.uk, clarified the http:www.Moneyfacts/, and
situation by stating, "most life http:www.MoneyExtra/ not only
insurance companies offer a wide provide comparisons of financial
range of insurance and investment products, but also information to
services - for example pension, help consumers make informed
investment funds, investment decisions. With organisations
like Which? writing publications sufficient information to make
such as ‘Be Your Own Financial their own financial judgements.
Adviser', the focus has turned
to providing consumers with
About the Author:
Moneynet.co.uk is the UK's most established personal finance research and data website. The company offers consumers a wide range of low cost financial products: from mortgages and personal loans; to car, home and medical insurance; credit cards; savings accounts and best-buy fixed rate products.
http://www.moneynet.co.uk
Source: www.isnare.com
