Following are the points of differences between insurance and assurance :
| Basis of difference |
Insurance |
Assurance |
| 1. 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 as death. |
| 2. Based on |
Principle of indemnity. |
Principle of certainty. |
| 3. Protection against |
An anticipated event. |
A definite event. |
| 4. Timing for payment of claim |
Only at the happening of uncertain event. |
Either on the happening of the event claim event. or on maturity. |
| 5. Duration |
Only for one year, renewable every year. |
Long-term, running over number of years. |
| 6. Type |
General insurance. |
Life insurance. |
| 7. Purpose |
To indemnify the insured against any kind of risk. |
To assure payment on the happening of specified event. |
| 8. Policy |
Taken to prevent a risk or provide against it. |
Taken against an event whose occurrence is certain. |
| 9. Insurer |
Undertakes to reinstate the insured to his/her previous position. |
Undertakes to pay the sum assured when the event takes place. |
| 10. 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 |
