Insurance Study Materials ( Part- C)

Difference between assurance and insurance:Insurance Study Materials
One thing that many people find confusing is the specific use of the term "insurance" and the use of "assurance". What are the differences between them? In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.

The Concise Oxford Dictionary brings out the subtle difference between the two terms.

Assurance refers to those insurance policies which guarantee payment on death of the person whose life is insured or on expiry of the prescribed period, whereas insurance refers to those policies where payment would be made only in the prescribed circumstances — death or accident happening within a specified period.Insurance Study Materials

Definition of Insurance
"Insurance" is a noun that means a way of guaranteeing the protection of an item or person, or a guarantee against loss or damage. The term "insurance" also refers to the premiums paid for this protection---health insurance or car insurance, for example.

Definition of Assurance
"Assurance" deals with "inspiring confidence" or making someone feel certain and comfortable with a decision. Also, it means the absence of doubt.

►    An assurance is some sign - perhaps someone's word - evidencing that something will, or will not, happen.

►    Insurance is some form of protection against the cost or damage done, in case an un-wanted event should happen. Example: A strong air force, well provided with all the necessary tools and equipment, is a very blessed insurance, cheaply bought, in case the wretched Dictator should determine to send his terrific flying machines over our Island.

►    To speak of assurance, in the above example, would be to speak of our ways of knowing that the maurauders will never come. Insurance Study Materials