Difference between Insurance and Assurance
Aspect |
Insurance |
Assurance |
---|---|---|
Meaning |
Protection against specified risks in exchange for payment, known as a premium. |
Assurance is like a special kind of protection for specific events that are certain to happen. |
Coverage |
Insurance helps when things unexpected happen, like accidents or sickness. |
Assurance ensures you’ll get money for certain things like passing away or reaching a certain age. |
Premium Payments |
With insurance, you pay based on how likely bad things might happen. |
Assurance payments depend on how sure the event is and how much money is promised. |
Purpose |
Insurance keeps you safe from unexpected problems and money losses. |
Assurance gives security for certain things you know will happen, like planning for your passing or retirement. |
Duration |
Insurance can be short or long, depending on what you need. |
Assurance usually lasts a long time, focusing on lifelong protection. |
Examples |
Health, car, and home insurance are common types. |
Life insurance and annuities are examples of assurance. |
Claim Process |
With insurance, you need to ask for help when bad things happen. |
Assurance promises to give you money for certain events without needing to ask. |
Certainty |
Insurance deals with things that might or might not happen. |
Assurance focuses on sure things, like knowing that everyone will pass away someday. |
Difference between Insurance and Assurance
Insurance and assurance are financial products that protect against risks and certain events. Insurance covers things that might happen, like accidents, while assurance covers things that are sure to happen, like any certain event. They help people feel secure about their finances and plan for the future. Understanding the difference between them is important for making smart financial decisions.