The terms insurance and assurance are used frequently in the financial industry. Insurance has evolved as a process of safeguarding the interest of people from loss and uncertainty. It may be described as a social device to reduce or eliminate the risk of loss to life and property. Insurance provides financial coverage for unforeseen circumstances surrounding an event, such as fire, theft, or flooding. Assurance provides coverage for events that will occur, such as death. Assurance refers to the agreement in which the insurer provides coverage of an event, which will happen sooner or later, such as death. A life assurance policy will always result in a payment being made because the investment is combined with the sum insured.
Distinguish between Insurance and Assurance are given below:
- Insurance refers to an arrangement, which provides cover for an event that can happen but not necessarily, like flood, theft, fire etc.
- An insurance policy may not sure to become a claim.
- The insurance policy should be used for the indemnity contracts.
- Insurance comes from the insured.
- Insurance denotes the practice.
- The term insurance is used only when the risk.
- In a contract of insurance, the insured must suffer a damage or loss, to claim the compensation.
- Assurance is a provision for coverage of an event, whose happening is certain, such as death.
- Assurance policy is bound to become a claim.
- Assurance policy should be used for life contracts.
- Assurance comes from the insurer.
- Assurance denotes the principle.
- In assurance, there are no risks.
- In a contract of assurance the sum assured is bound to be paid whether insured suffers a loss or not.