Many get confused often between the term called 'Insurance' and 'Assurance'.
Person willing to avail any kind of insurance ought be well aware of such differences.
Insurance is for something about which you are not sure of happening.
On the other hand, assurance is for something which is definite, and will surely happen in future.
Thus, simplifying the 'term assurance' better, it acts as an insurance, but you get the payment only within a fixed term.
For example, if you have got the assurance term for 18 years, you will get the entire payout only within the set period.
The payout that you are given by your insurer/assurer remains the same, no matter when you are availing within the term period.
Suppose, if you have got a term assurance covering pay out of £100,000 in the set period of 18 years, you will get the entire amount even if you die in first few years of assurance.
In this regard, it can be termed that this assurance deal is a sure certain shot to give you payout if you are sure of someone's death.
Price of term assurance is determined by various factors.
The first and most important to tell you is that less the risk of death is, less the price of assurance will be.
For example, if you are a heavy smoker, there is greater chance that you will not have better life than the non-smoker one.
Likewise, if you want to avail the higher payout, the price of buying the assurance will be costlier.
Similarly, shorter the term of assurance is, cheaper the cost of buying it will be.
Even there is provision that non-smoker get bonus, and can buy the assurance at lower price.