There's a famous saying that "nothing is certain but death and taxes". We all know we're going to die sometime, but there's no way of predicting exactly when. And if you pass away without being prepared, your family's financial security could be at risk.
That's where life assurance (also known as life insurance) can help. If you have a valid life insurance policy when you pass away, your family will receive a 'benefit' that could help them to cover their costs, from funeral arrangements and mortgage payments to other bills.
How life assurance works
When you take out a life assurance policy, you'll have to choose your level of cover (i.e. how much your family would receive if you passed away), as well as how long you want the cover to last. Some life insurance policies last for a fixed amount of time, while 'whole-of-life' insurance policies last for the rest of your life, no matter how long that is.
The level of cover you choose will affect how much you pay each month, as will your personal circumstances - things like your age, current health, and so on.
If you die while your policy is valid, your family will receive a payout - just as long as you meet the criteria of the policy (for example, the policy may not pay out if your death is a result of a known pre-existing medical condition).
Critical illness cover
Some life assurance providers allow you to add critical illness cover to your policy. This additional cover provides security in the event that you become seriously ill. Serious illness often requires time off work and/or expensive medical treatment, so this payout could come in very handy.
Life assurance / life insurance - what's the difference?
There's no difference - they're simply two different ways of describing the same thing. In theory, 'assurance' provides cover for something that will definitely happen, while 'insurance' is meant to protect against the possibility of something happening. Even so, people tend to use the two terms to mean the same thing.
