Question

Difference between insurance and assurance.

Answer 1

BASIS FOR COMPARISON	INSURANCE	ASSURANCE
Meaning	Insurance refers to an arrangement, which provides cover for an event that can happen but not necessarily, like flood, theft, fire etc.	Assurance is a provision for coverage of an event, whose happening is certain, such as death.
Based on	Principle of indemnity	Principle of certainity
Protection against	An anticipated event	A definite event
Timing for payment of claim	Only at the happening of the uncertain event.	Either on the happening of the event or on maturity.
Duration	Only for one year, renewable after year.	Long term, running over number of years.
Type	General insurance	Life insurance
Purpose	To indemnify the insured, against any kind of risk.	To assure payment, on the happening of the specified event.
Insurer	Undertakes to reinstate the insured to his/her previous position.	Undertakes to pay the sum assured, when the event takes place.
Insured	Undertakes to pay premium regularly, in exchange for indemnity against risk.	Undertakes to pay premium regularly, in exchange for benefit, on the occurrence of the event covered.