Life assurance

Life assurance is an insurance policy which pays a lump sum to the named beneficiaries when the insured person dies or reaches a certain age. Life assurance is a term which is used predominately in the UK however in Australia we call this type of cover life insurance.

The term assurance does not relate to a possibility but a certainty such as death. Where insurance is protection against a possible hazard which may or may not occur, term life insurance is a policy that will pay a specified sum of money to the estate of the insured or nominated beneficiary upon the death of the life insured. In exchange, the insured person agrees to make regular payments of life insurance premiums (on a monthly or quarterly basis) to the life insurance company.

The life cover policy is subject to strict limitations, exclusions, terms and conditions and it is therefore extremely important for you to fully understand the implications before you sign the contract. For further information on life insurance please visit our information articles.

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December 2009