What Is The Difference Between Insurance and Assurance

Difference Between Insurance and Assurance

Generally, these two words are used synonyms but their meaning is different. The term assurance is used in the life insurance policy. In life insurance policies, its meaning is that the policyholder is assured of receiving money from the insurance company.  This assurance is not only for his life but also when he is dead. Hence, the insurance company has to pay either to the policyholder or to his successor, the only question is to fix the time of payment.

  • Relation: It is related to life insurance.

  • Payment of Compensation: The compensation is paid whether the event happens or not.

  • Nature of Risk: It is used when the risk is of certain nature that is it is bound to happen. 
  • Condition to Claim Compensation: The insurance company is bound to pay whether the insured suffers a loss or not. 

On the other hand, the term insurance is used in indemnity policy like a fire insurance policy, marine insurance policy, etc. Insurance means the insurance company will pay the compensation to the insured only when there is some loss incurred by the insured. If a person gets his godown insured against fire and no fire incident takes place during that period, then the compensation will not be paid by the insurance company.

  • Relation: It is related to fire and marine insurance. 
  • Payment of Compensation: The compensation is paid only on the happening of an event.

  • Nature of Risk: It is used when the risk is of an uncertain nature, it may or may not happen.

  • Condition to Claim Compensation: The insured must suffer a loss to claim the compensation.

The life insurance business is mainly carried on in the Public Sector by the following company:

                      The Life Insurance Corporation of India (LIC)

  •  Now the life insurance business is also carried on in the Private Sector by the following companies:

1. Aviva Life Insurance Co. India Pvt. Ltd.
2. Birla Sun Life Insurance Co. Ltd.
3. ING Vysya Life Insurance Company Ltd. 
4. Kotak Mahindra Old Mutual Life Insurance Ltd.
5. Life Insurance Corporation of India.
6. Max New York Life Insurance Co. Ltd.
7. Met Life India Insurance CompanyLtd.
8. Reliance Life Insurance Company Ltd.
9. Sahara India Life Insurance Co. Ltd.
10. SBI Life Insurance Co. Ltd.
11. Shriram Life Insurance Co. Ltd.
12. Tata AIG Life Insurance Company Ltd.
13. DLF Pramerica Life Insurance Co. Ltd.
14. Future Generali Life Insurance Company Ltd.
15. HDFC Standard Life Insurance Co. Ltd.
16. ICICI Prudential Life Insurance Co. Ltd.
17. IDBI Fortis Life Insurance Co. Ltd.
18. Bajaj Allianz Life Insurance Co. Ltd.
19. Bharti AXA Life Insurance Company Ltd.
20. Star Union Dai-ichi Life Insurance Company Ltd. etc.

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