Assurance
In South Africa you will still hear the term assurance, but less often than in the past. The term insurance refers to the provision of cover for an event that might take place. Assurance is referred to in the case of cover for an event that will definitely take place.
When referring to a life insurance policy it is one that provides cover for a specified time, for example five years. If the person’s whose life was insured passed away the insurance company will have to pay out the agreed sum to the beneficiary of the policy. If the person is still alive at the end of the term no payment is made.
Life assurance will always pay out. Here we are dealing with a combination of an investment as well as the insured sum. The policy will pay out at a certain age or at the death of the insured. The term assured life refers to the individual insured.
In short term insurance, such as car insurance, the term assurance is never used.