Life assurance is a permanent life insurance policy that pays some money to your beneficiary after you die. With life assurance, it does not matter how soon after you buy a life assurance policy you die. Your beneficiary receives a payout after your death. Some life assurance providers will ask that you pay premiums till you die but in other cases, you stop paying premiums when you get very old. Even after you stop paying premiums, your beneficiary will still receive a payout after you die.
Life assurance is not as popular as life insurance policies but here are pros and cons of life assurance to help you decide if life assurance will be of benefit to you.
Pros of life assurance
- When you purchase a life assurance policy, you are sure that your dependent will receive a payout regardless of when you die.
- Your insurance provider will use some of the fees you pay to make investments in stocks, bonds or other markets. Some of the profit from the investment will be added to the minimum death benefit your beneficiary receives.
- You can cancel your insurance policy in order to receive a cash value of your policy.
Cons of life assurance
- Life assurance is more expensive than a regular life insurance policy.
- If you cancel your policy to receive a payout, you will have to pay a large fee.
- The value of the payout your beneficiary receives reduces if your investments do not make a profit.