Difference Between Insured and Assured – Are You Insured or Assured Under Health Insurance Policy?

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Insured and Assured in Health Insurance Policy

It can often get difficult for a layperson to understand certain terms so commonly used in insurance. Do you really get insured under a policy or assured? What is the difference? This blog throws some light on both to help you understand better.

Insured and assured both are common terms used in insurance jargon. However, they aren’t so common for the common man, who often tends to get confused between both. When they buy a health insurance policy, some fail to understand whether they are now insured by that plan or assured. Here in this post, we discuss both these terms in detail to help you understand better what each stands for and whether you really are insured or assured under your health insurance plan.

What Does Insured Mean in Health Insurance Policy?

Let’s begin by explaining what exactly is the meaning of insured in case of a health insurance policy. The whole objective of buying health insurance for you or your family is that you intend to secure their and your future health. This simply means that in the event of an unforeseen medical emergency that may require a huge spend on healthcare, you need not put a heavy burden on your pocket.

For this purpose, you buy a health insurance policy that would offer you insurance coverage for the total amount borne on healthcare expenditure. This means that you are now “insured” under your health insurance plan and will be covered by your insurer (the insurance company) in case of any hospitalization or huge spend on healthcare needs.

Note: There’s yet another reference to the term insured when speaking of insurance in general. The term insured commonly refers to the policyholder who has bought the insurance policy. He/she now becomes the “insured party” under the specific plan, while the insurance company or the service provider is referred to as the insurer.

What Does Assured Mean in Health Insurance Policy?

Now let’s discuss what exactly does the term assured stand for when speaking of insurance policies. We already understood in the section above the two common connotations for the term insured. Assured, on the other hand, is more commonly used with regard to life insurance policies or endowment plans. The person who is “assured” is entitled to be compensated by the insurance company in the event of an unfortunate mishap which may result in either disability or death of the person.

Besides that, the added benefit is that the ‘assured’ still stands a chance to receive monetary benefit under life insurance even if he/she has outlived the term of the policy. This is why Assurance Policies generally have a longer validity and tenure than General Insurance Plans.

In short, assurance is what your insurer would give you to compensate you or your beneficiary(ies) in the event of a sudden unfortunate life event resulting in disability or death. Let us now try and understand the difference between the two terms ‘insured’ and ‘assured’ in the next section.

What is the Difference Between Insured and Assured?

The prime difference between these two terms, both commonly used with reference to insurance, is as defined below:

  • Insurance simply means providing coverage or compensation for a specific loss incurred, whether in terms of accident or damage to property, such as in the case of house or vehicle), or loss incurred in terms of healthcare costs, such as the one in case of health insurance. The insurer in this case is then obligated to provide insurance coverage to the insured for the loss incurred by the latter.
  • Assurance, as the name literally translates to, means that the insurance company (more specifically life insurance providers) offer a certain assurance to provide monetary benefit to you or your beneficiaries in your absence in case of any eventuality or mishap. This may involve critical illness, temporary or permanent disability, or death. In this event, the person covered under the life insurance plan is “assured” of certain monetary death benefits.

Insured vs Assured in Health Insurance Policy – The following table details these differences more clearly:

Category or Parameter Insured Assured
Common Usage General or Health Insurance Life Insurance
Type of Policy Issued Health Insurance Plans, Motor Insurance, Mobile Insurance Life Insurance, Endowment Plans, Term Insurance, ULIP
Coverage Offered Medical expenses, property loss, home theft, motor damage Disability and death benefits
Payment for Claim Almost as much as the total amount of loss incurred Predetermined amount provided to cover a specific life event, such as critical illness or death of the policyholder
Total Number of Claims Permissible Under the Plan Multiple claims allowed Only one single claim allowed
Number of People Insured Under the Policy Can be one or more based on the nature of the policy Only one person assured
Policy Renewal Annually or on term expiry N/A
Risks Covered Unforeseen events such as theft, natural calamities, fire, accidents, or damage Uncertain but predictable risks such as death
Who is Insured Under the Plan Person and/or property Only people

Importance of Being Insured

In case of uncertain, unforeseeable situations, insurance comes to your rescue as your biggest savior. It helps compensate you for your loss which can be difficult to deal with at the time. Whether it is loss to your physical property (house or vehicle) due to a natural calamity or man-made disaster such as fire, or it is loss to life in the form of death or disability, insurance can be of great help.

At a time when you’re struggling to cope with these mishaps, insurance can help take care of your finances to reduce the burden on you to a considerable extent. It is essentially a financial backup for your family and you, your true friend in time of need. You can check up a number of life, health and general insurance plans online and after thorough research, pick the one that best suits your needs. Health insurance is definitely a must in today’s times, especially the post-pandemic era, when we learned that life can really be unpredictable.

Also Read: What are Network Hospitals in Health Insurance?

Choose the best health insurance policy in India and free yourself from the worry of healthcare expenses for you or your loved ones.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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Aug 23, 2022
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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