Life Assurance vs Life Insurance [Full 2025 Guide]

Q: What is life assurance?

Life assurance provides a pay out which is guaranteed (or assured ) to your loved ones when you pass away. There’s no expiration date on the policy as cover lasts for the rest of your life and the pay out will be made when you pass away (not if you pass away). For this reason, life assurance policies are often used to provide loved ones with an inheritance or to help cover funeral costs . However, you’ll need to pay premiums for the rest of your life. Therefore, if you secure cover at a young age you could risk paying more into the policy than it will pay out. Examples include whole of life insurance and over 50 life insurance.

Q: What is life insurance?

Life insurance will cover you for a specified period (the term ) and a pay out will be made if you pass away during this time. You’ll choose a term length to best suit your needs (often this can be up to 40/50 years). If you outlive the term, no pay out will be made. Life insurance is often a popular choice for young families as an affordable way to help protect living costs and/or large debts like a mortgage. Examples include level term life insurance and decreasing term life insurance.

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Life assurance vs life insurance

What’s the difference between life assurance and life insurance?
What is life assurance?
What is life insurance?
Life assurance or life insurance - Which is right for you?
What is the price difference between life assurance and life insurance?
Is life assurance better than life insurance?
Life assurance or life insurance? [Top tips for making the right choice]
Life assurance FAQs

What’s the difference between life assurance and life insurance?

While both provide protection for your loved ones after your passing, they don’t work in the same way.

The main difference is that life assurance pays out when you pass away, whereas life insurance pays out if you pass away (during the policy term).

You may have seen both terms used interchangeably when searching for life cover. However, there are some key differences:

Life assurance	Life insurance
Cover lasts for the rest of your life	Cover lasts for a specified term
Pay out is guaranteed when you pass away	Pay out is made if you pass away during the term
Well suited to those later in life who want to leave an inheritance or help cover their funeral costs	Well suited to young families who want to help protect their living costs and/or mortgage debt
Could secure cover without needing to provide medical details (through an over 50s plan)	You’ll need to provide medical information during the application process
Typically more expensive due to providing lifelong cover	Typically the cheapest option, especially if you’re young

Whether life assurance or life insurance is better suited to you will depend on your personal circumstances and budget.

By using an FCA-regulated broker service, like Reassured, you can compare both life assurance and life insurance to help you make an informed decision as to which best meets your needs.

We can provide you with multiple quotes from leading UK insurers FREE of charge and without obligation.

Simply get in touch today for your free quotes.

Compare Life Assurance vs Life Insurance Quotes »

What is life assurance?

Life assurance provides a pay out which is guaranteed (or assured) to your loved ones when you pass away.

There’s no expiration date on the policy as cover lasts for the rest of your life and the pay out will be made when you pass away (not if you pass away).

For this reason, life assurance policies are often used to provide loved ones with an inheritance or to help cover funeral costs.

However, you’ll need to pay premiums for the rest of your life. Therefore, if you secure cover at a young age you could risk paying more into the policy than it will pay out.

There are two types of life assurance:

Whole of life insurance

Whole of life insurance is a form of life assurance that can be well suited to those later in life who are still in good health as the potential sum assured is much larger than with an over 50s plan.

Cover lasts for life
Pay out is guaranteed
Sum assured up to £1,000,000
Medical information required during the application process
Available from 27p-a-day through Reassured's advised team^±

Compare Whole of Life Quotes »

Over 50s plan

Over 50 life insurance (also known as an over 50s plan) guarantees acceptance to UK residents aged 50 - 85, an ideal option if you’re in this age group and have struggled to secure other types of cover in the past.

Cover lasts for life
Pay out is guaranteed
Sum assured up to £20,000
No medical information required during the application process
Premiums could start from just 20p-a-day through Reassured⁺

Compare Over 50s Plans »

Reassured can help you compare life assurance policies from some of the UK’s best life insurance providers.

Simply get in touch for your free and no-obligation quotes.

What is life insurance?

Life insurance will cover you for a specified period (the term) and a pay out will be made if you pass away during this time.

You’ll choose a term length to best suit your needs (often this can be up to 40/50 years). If you outlive the term, no pay out will be made.

Life insurance is often a popular choice for young families as an affordable way to help protect living costs and/or large debts like a mortgage.

The most common forms of life insurance are:

Level term life insurance

Level term life insurance provides a fixed such assured which can help to cover large expenses such as family living costs and/or an interest only mortgage.

Cover lasts for a set period
Pay out is made if you pass away during the term
Sum assured up to £1,000,000
Medical information required during the application process
Terminal illness included at no extra cost
Critical illness cover can be added for an addition cost
Available from 20p-a-day through Reassured^†

Compare Level Term Quotes »

Decreasing term life insurance

Decreasing term life insurance provides a sum assured which decreases throughout the policy term, making it ideal for helping to cover a repayment mortgage.

Cover lasts for a set period
Pay out is made if you pass away during the term
Sum assured up to £1,000,000
Medical information required during the application process
Terminal illness included at no extra cost
Critical illness cover can be added for an addition cost
Available from 20p-a-day through Reassured^¥

Compare Decreasing Term Quotes »

For a complete life insurance comparison, why not contact Reassured today?

We can compare both level term and decreasing term life insurance quotes and provide you with our most affordable rates.

Life assurance or life insurance - Which is right for you?

The right option for you when choosing between life assurance vs life insurance will depend on:

Your personal circumstances

Your age and health can influence which policy could be more beneficial for you.

If you’re young and in good health, term life insurance will likely be the most affordable option.

Whereas, if you’re over the age of 50 (and have less than favourable health), an over 50s plan could be an ideal way for you to secure the cover you need without having to provide any medical information.

Whole of life insurance could be well suited to those who are at an older age, and still in good health, who want to secure a higher sum assured than an over 50s plan can offer.

Securing whole of life insurance at too young of an age (for example in your 20s or 30s) could lead to you paying more in premiums than the policy will pay out.

At Reassured, we’ll take your personal circumstances into consideration and provide you with our most suitable quotes.

What you’d like to protect

Each policy type can be well suited to protecting different aspects of your life so, before securing a policy, it’s important to consider what you’d like to cover.

Most commonly, life insurance is taken out to help cover:

Mortgage
Household bills
Family living costs
Additional childcare
Outstanding debts
Funeral costs
An inheritance

As life insurance is term-based it’s ideal for covering a mortgage as you can have your policy term and sum assured mirror your remaining mortgage term and balance.

Whereas, due to life assurance providing lifelong cover, it’s often used to help cover funeral costs and/or to provide an inheritance.

Your budget

Life assurance policies tend to be more expensive as the cover lasts for life and a pay out is guaranteed.

It’s important to be aware that you’ll be required to pay premiums for the rest of your life in order to keep your cover valid.

If you were to fall behind on payments this could invalidate your cover and your loved ones won’t be able to make a claim when the time comes.

Before securing a policy it’s important to assess your long term budget and whether you could afford these ongoing premiums.

Life insurance policies are typically the more affordable option as you’re covered for a set period, plus you’ll only need to pay premiums during this time.

Decreasing term life insurance, in particular, is often the most affordable form of cover.

Whatever policy best meets your needs, comparing quotes can help you find a great deal. Why not let Reassured help you do this, free of charge?

Why compare life assurance vs life insurance quotes through Reassured?

Compare multiple quotes - Free of charge from leading UK insurers (including Aviva, AIG, Zurich, Legal & General and more)
‘Excellent’ service - Over 80,000 reviews on Trustpilot
Team of experts - To provide all the information you need to make an informed decision
FCA-regulated - Our service is regulated by the Financial Conduct Authority
Support & guidance - Our friendly team are on hand throughout the entire application process
Over 15 years of experience - In helping families find the protection they need
Affordable premiums - Quotes through Reassured start from just 20p-a-day^†

What is the price difference between life assurance and life insurance?

Life assurance tends to be more expensive than life insurance due to providing lifelong cover.

With both options, you’ll be required to provide the following information during the application process:

Age
Current health & wellbeing
Medical history
Smoking status
Occupation
Lifestyle choices (such as hobbies and alcohol consumption)
Policy type
Policy term
Sum assured

This information allows insurers to assess your level of risk and your monthly life insurance premium can be calculated accordingly.

The exception to this is with an over 50s plan. With this option you’ll only need to provide information about your age, cover amount and (sometimes) your smoking status.

The table below shows the price difference between a life assurance policy (whole of life insurance) vs a life insurance policy (level term life insurance). Please note, the quotes are for non-smokers in good health.

Age	Level term life insurance (20 year term and £150,000 of cover)	Whole of life insurance (£50,000 of cover)
20	£3.75	£32.78
25	£4.31	£33.72
30	£5.36	£38.12
35	£7.74	£43.65
40	£10.77	£51.30
45	£16.26	£57.58
50	£26.54	£63.22

As you can see from the table above, there’s significant price difference between life insurance and life assurance.

Regardless of which policy best meets your needs, it’s essential to compare quotes to ensure you’re securing affordable cover.

Using a life insurance broker, like Reassured, can allow you to compare a variety policy types from multiple insurers.

By doing this, not only can you gather all the information you need to make a fully informed decision, but you can also obtain our best deals.

Simply get in touch today for your free quotes.

Life Assurance vs Life Insurance Quotes » Find Our Best Deal

Is life assurance better than life insurance?

One isn’t necessarily better than the other, it will ultimately be down to your personal circumstances and budget as to which is better suited to your needs.

As outlined in this article, life assurance and life insurance can be used to cover different aspects of your life and are available at different price points.

Your age and health could also dictate which option could be more suitable.

Below are the pros and cons of life assurance vs life insurance:

Life assurance	Life insurance
PRO: Can provide your loved ones with financial support after your passing	PRO: Can provide your loved ones with financial support after your passing
PRO: Cover lasts for life	CON: Cover only lasts for a set period
CON: Premiums tend to be more expensive	PRO: Premiums tend to be very affordable
PRO: A pay out is guaranteed when you pass away	CON: A pay out is made if you pass away during the policy term
CON: Premiums must be paid for the rest of your life	PRO: Premiums are only paid for a set period

If you need help deciding which option is best for you, why not contact Reassured?

We can take your personal circumstances and reasons for securing cover into consideration and provide you with our most suitable options.

Life assurance or life insurance? [Top tips for making the right choice]

Consider what you want to protect - For example, if you need cover for a set time to cover a mortgage, life insurance could suffice. However, if you want to help loved ones cover funeral costs, life assurance could be better suited
Assess your budget - Life assurance premiums will need to be paid for the rest of your life so you’ll need to consider whether you can afford these ongoing costs
Do you have a health condition? - If you have less than favourable health an over 50s plan could allow you to secure the cover you need without providing medical information
Compare quotes - Comparing both options can allow you to gather all the information you need to establish the right option for you

Compare life assurance vs life insurance quotes

The best way to determine what option is right for you is to compare multiple quotes.

Using a broker, such as Reassured, can allow you to compare both life assurance and life insurance quotes from some of the UK’s best insurers (free of charge).

A friendly member of our team can provide you with all the information you need to make an informed decision.

We can also support you throughout the entire application process and answer any questions you might have.

Protecting your loved ones doesn’t have to be a difficult process, simply get in touch to obtain your free and no-obligation quotes.

Compare Life Assurance vs Life Insurance »

Life assurance FAQs:

Why is it called life assurance instead of life insurance?

Life assurance gets its name from the assured (guaranteed) pay out it provides.

Life insurance policies pay out if the policyholder passes away during the policy term, whereas life assurance policies last for life and pay out no matter when the policyholder passes away.

Therefore, a pay out is assured to your loved ones upon your passing.

What is the purpose of life assurance?

The purpose of life assurance is to provide your loved ones with financial protection should the worst happen.

It does this by guaranteeing a lump sum pay out to your loved ones upon your passing.

These funds can then be used to help cover financial commitments and other essential costs (such as your funeral).

Alternatively, life assurance can be taken out to help provide a lump sum to help cover inheritance tax on your estate (IHT is charged at 40% on any sum which takes your estate over the threshold of £325,000).

What are the disadvantages of life assurance?

The main disadvantage is that you’ll be required to pay premiums for the rest of your life in order to keep cover valid.

Depending on when you take a policy out, this could become costly over a long period of and could lead to you paying more into the policy than the value of the pay out sum.

Is life assurance worth it?

Ultimately, whether life assurance is worth it for you will depend on your personal circumstances.

If your main goal when securing cover is to guarantee your loved ones with an inheritance or to help them cover the cost of your funeral, life assurance could be beneficial.