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Life Assurance

Life is full of uncertainties. But we can prepare for the unexpected and the unwanted events in our life by securing the future for our loved ones in the event that we fall victim to life's uncertainties (i.e. our untimely death).

Getting life assurance quotes provides this kind of security… and more.

Now, you may ask, is life assurance just the same as life insurance?

Basically, they both provide the protection of one's income in the event of his death. That means that if an Insured Person dies, his lost income will be compensated since the insurance company will pay the death benefit to the beneficiaries. The money that the beneficiaries receive can be used to pay for the family's or the insured's debts, the insured's hospital and burial expenses, the family's day-to-day expenses and so on.

Now, life assurance goes one step further by ensuring that benefits will be paid – whether the Insured dies before the policy matures or is still living at the time of the maturity of the policy.

You see, the nature of insurance policies as a whole is that it protects against a loss caused by something that might happen. Examples here will be fire insurance, health insurance, car insurance. These products protect against possible hazards. It may or may not happen during the life of the policy. If these events happen while the policy is in force, the insurance will kick in to pay for the coverage. If these events don't happen, there are no forthcoming payments from the insurance company.

The same is true with life insurance (or more specifically term life insurance). The coverage only pays out if the Insured dies during the effective date of the policy. If the Insured outlives the coverage period of the policy, then the policy is terminated. The Insured does not have any coverage and if he dies after the end of the coverage period, there are no death benefits to be received.

Thus, with a life assurance policy, you have an insurance component and a savings component. It is guaranteed to pay out – whether due to the Insured's death or when the policy matures and the Insured is still alive at that time.

The difference lies in the cash value!

Life assurance policies have cash values. When premiums are paid, the insurance company sets aside a portion for the life insurance coverage and a portion for the savings component of the policy. This savings component is allowed to accumulate and earn interest over time. When the Insured dies, the Insurance Company will pay the death benefits plus any existing cash values. When the Insured survives the coverage period, the Insured will receive an amount equivalent to the amount insured plus any cash values.

Cash Value policies and their options

Cash value policies allow for many possibilities:

  • Surrendering the policy before it matures. One can choose to terminate the policy before its maturity. You will get the existing cash values minus any penalties or fees involved in surrendering a policy early. This option is discouraged as it means that you are without cover at the time that you may need it and that if you decide to buy another policy, it may now have different premium ratings. Surrendering a policy may not be a wise use of premiums already paid, especially during the early years of the policy, where the cash values are still small as compared to what has already been paid in premiums.
  • Allowing the cash value to accumulate and receiving the cash value at the end of the policy. You can allow the cash values to remain in the policy and earn interest. The advantage here is that cash values that remain in the policy are considered tax-deferred. You don't pay any taxes on interest earnings until such a time that you withdraw the cash values from the policy.
  • Using the cash values to pay for premiums. There is an automatic cash value loan option that allows the policy to get money from its cash values to pay for the premiums. This way, even if you are unable to pay your policy, your policy still remains in force as long as there are cash values that can fund the premiums. Please take note, however, that this may decrease the cash value.
  • Taking out a loan on the cash values. You can also take out a loan based on the amount listed as your current cash values. If you are unable to pay this loan and you pass away, the loaned amount plus interest is deducted from the proceeds of insurance in the policy.

The advantage of cash value policies

Cash value policies, although more expensive, have several advantages:

  • It increases the value of the insurance payout. The beneficiaries get the cash values on top of the basic death benefit.
  • It allows you some breathing space if you are unable to pay your premiums for a few months. There are times when you have unexpected bills or you are out of job. During these times, you don't have to dread losing your insurance coverage. The coverage can still continue even without premium payments since the cash values can kick in to fund premiums that have become due.
  • It allows you with access to cash. You can take out a loan on your insurance and still enjoy the coverage it gives.
  • It allows you to terminate your policy and still get something out of it. With term life insurance, once you stop paying the premiums, the coverage simply stops and you will not get back any of the premiums you already paid.

Types of Life Assurance policies

These types of policies fall under what is called "permanent life insurance", where payments are assured. Some permanent life insurance policies include:

  • Whole life policy: which covers the Insured for his entire life
  • Universal life policy: which allows the Policy owner to choose the way and frequency premium payments are paid
  • Variable life policy: which allows the Policy owner freedom as to where he will invest the cash values

Getting Life Assurance

Getting covered with life assurance is as easy as one, two, three!

  1. Know your needs. How much coverage will you need? What type of policy will best answer this need?
  2. Contact us for life insurance quotes. We will gladly send you the best quotes from our partners.
  3. Choose and apply! Choose the policy that works best for your needs and complete the application form.

Please note: Quotes are given on a standard premium rating basis. Some policies may require getting a medical exam. This will help the insurance company determine your premium rating. The need for medical exams will depend on your age and the amount of coverage you want. The basic medical exam will include a physical examination and vitals check (blood pressure, heart rate, etc.).

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