DEFINITION of 'Assurance'

Coverage of an event that is certain to happen. Assurance is similar to insurance (and sometimes the terms are interchangeable) except that insurance protects policyholders from events that might happen.


For example, a person can choose to purchase life assurance or term life insurance. (Note in the U.K. "life assurance" is another term for "life insurance".) The event in question is the death of the person the policy covers. Since the death of this person is certain, a life assurance policy results in payment to the beneficiary when the policyholder dies. A term life insurance policy, however, will cover a set period of time, such as 30 years, from the time the policy was bought. If the policyholder dies during that time, the beneficiary receives money, but if the policyholder dies after the 30 years, no money is received. The assurance policy covers an event that will happen no matter what, while the insurance policy covers a event that might happen (the policyholder might die within the next 30 years).

  1. Death Benefit

    The amount on a life insurance policy or pension that is payable ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
  4. Permanent Life Insurance

    An umbrella term for life insurance plans that do not expire ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
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  1. What are examples of the largest companies in the insurance sector?

    In the United States, the two largest life insurance companies, in terms of assets as of 2015, are Metlife and Prudential ... Read Full Answer >>
  2. What is the difference between term and universal life insurance?

    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Full Answer >>
  3. Does renters insurance cover personal injuries?

    Renters insurance provides two main forms of coverage – liability and contents insurance – and they are offered together ... Read Full Answer >>
  4. Does renters insurance cover jewelry?

    Renters insurance provides personal property coverage that covers your personal property – including jewelry – in case of ... Read Full Answer >>
  5. Why might landlords require renters insurance?

    Landlords can require renters insurance to lower their own liability and insurance costs. According to data from the Insurance ... Read Full Answer >>
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    The expense ratio in the insurance industry is a measure of profitability calculated by dividing the expenses associated ... Read Full Answer >>

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