Lesson 5 Difference between insurance and assurance

What is the primary purpose of insurance?

• To provide financial protection against unexpected events

• To guarantee a payment at the end of a term

• To offer health and wellness advice

• To replace lost items

How does assurance differ from insurance?

• Assurance covers risks that is bound to happen whilst insurance is based on the likelihood of the event taking place

• Assurance generally offers a guaranteed payout, while insurance provides coverage for risks

• Assurance requires higher premiums than insurance

• Assurance is mandatory, whereas insurance is optional

Which of the following best represents what an assurance policy typically guarantees?

• Financial assistance after an accident

• A life insurance payout upon death

• Coverage for stolen property

• Help with medical expenses

In which situation would an assurance policy likely be more appropriate?

• A savings plan for education

• Coverage for auto accidents and damages

• A policy guaranteeing funds after retirement

• A fixed-term life insurance contract

Which of the following statements accurately describes insurance?

• It is suitable for long-term investment planning

• It ensures financial gain at the end of a term

• It provides compensation for losses due to risk events

• It offers guaranteed returns on investments

Insurance is an example of?

• an indirect service

• a secondary industry

• a good

• none of the above

Which scenario best illustrates the function of insurance?

• A beneficiary receiving a fixed amount upon the policyholder's death

• A business receiving funds after a natural disaster

• An individual saving for their retirement

• A parent investing in their child's future education

What type of risk does assurance primarily address?

• Uncertain events like accidents and illnesses

• Guaranteed occurrences such as death or critical illness

• Financial risks from market investments

• The risk of theft and property loss

Which of the following is a characteristic of insurance policies?

• They are primarily concerned with future events

• They provide a guaranteed payout on a specific date

• They usually require a premium payment based on risk assessment

• They often involve long-term investment strategies

In life insurance, which aspect is a defining characteristic of assurance?

• Coverage against car accidents

• Guaranteed financial support at death

• Monthly payments for health check-ups

• Insurance against home property damage