Understanding the Differences Between Assured and Insured
The terms "assured" and "insured" are often used interchangeably in everyday conversations, but in the context of insurance, they carry distinct meanings. Establishing these differences is crucial to fully understand how insurance policies work and what they cover.
What is the Difference Between Assured and Insured?
The primary distinction between "assured" and "insured" lies in the nature of the contract and the role of the individual in the insurance process.
Assure
To assure someone is to provide reassurance or to convince them that a situation is secure or under control. This is often used in non-insurance contexts to provide confidence. For example, one might say, "I assure you will be fine if you drink that bottle of vodka." In this case, the speaker is expressing confidence in the outcome without covering it financially.
Ensure
To ensure means to make sure that a predetermined condition is met or implemented. This could be in the form of a safety measure, like making sure the car is locked, or a financial provision, as in the example, "I will pay you 1 million dollars to ensure you drink the vodka." In this case, the speaker is taking steps to guarantee the outcome through financial means.
Insure
To insure is to enter into a contract with an insurance company to provide financial coverage in the event of an unforeseen circumstance or loss. For example, "I can offer you insurance of a 1 million dollar payment if you come to harm after drinking the vodka." This involves a formal contract where premiums are paid in exchange for coverage.
Examples in Context
Here are some examples to illustrate the differences between "assure," "ensure," and "insure."
Assure: "I assure you will be fine if you drink that bottle of vodka." (Reassurance) Ensure: "I will ensure you drink the vodka by offering you 1 million dollars." (Guarantee through action) Insure: "I can insure you against harm by providing a 1 million dollar payment if you come to harm after drinking the vodka." (Financial coverage)Insurance Terminology
The terms "assured" and "insured" are frequently used in different types of insurance policies. Here's how they are used in various contexts:
Lifetime Insurance Policies
In life insurance, the individual whose life is protected by the policy is called the "assured." The amount of money to be paid in the event of the assured person's death is referred to as the "sum assured." In other words, the assured is the person covered by the policy. The "insured" pays the premium and is the person who will receive the death benefit if the assured person dies.
General Insurance Policies
General insurance policies, such as health, property, or motor vehicle insurance, use the term "insured" to refer to the individual or entity whose property or health is being covered. For instance, if a parent takes out a health insurance policy for their child, the parent is the "insured" and the child is the "assured" because the benefits will be received by the child.
The key takeaway is that "assured" pertains to the individual or entity being protected, while "insured" refers to the financial relationship between the individual and the insurance company. Understanding these distinctions is vital for making informed decisions about insurance coverage.