Life insurance or life assurance

Life Insurance and Life Assurance policies originally offered quite different benefits, however in common usage today they have come to mean much the same thing. Technically speaking ‘Assurance’ policies are policies where the payment of a promised sum is guaranteed, whether on death or at the end of a policy term. 

‘Insurance’ policies however provide for payment of the sum insured only in certain circumstances. Because the vast majority of Life policies arranged today are ‘Pure Protection Term Policies’ (they do not have any investment element and they stop providing life cover after the selected fixed number of years) then technically they are Insurance policies because the ’certain circumstances’ rule applies, although some people still describe them as Term Assurance. The confusion lies in the fact that death is assured for all of us, but not always within the term of a policy set up to run for a fixed number years.

All policies offered through Direct Life are ‘Pure Protection Term Policies’ and therefore we call them Life Insurance policies and not Life Assurance policies, although some of the insurance companies, whose products we offer, still describe them as Life Assurance on their documentation.