Selasa, 04 Januari 2011


The terms insurance and assurance have literary differences as well as technical differences in them. A rather thin line separating the meaning of two terms, their linguistic usage and usage as a terminology in common contractual and business language. The similarities in meaning of the two terms and the final result of being insured and assured about something is a cause that leads to confusion. It often leads people to connoting the two to be similar, congruent and even synonymous. A small explanation about the difference in the two words has been explicated in the following paragraphs.

Meaning of Insurance

The first thing that is bound to pop up in our head, when we hear the word insurance is our own insurance policy, such as life, dental and auto insurance. The business or act of providing insurance is indeed based upon the very meaning of the word. In simple, yet completely flourished words, insurance is the grantee of the prevention and recovery of any current or future loss of any kind. The term is closely associated with the word indemnity, which means, a prevention of probable loss in future. This has led to the term, insurance policy, which often is denoted to be a contract/agreement of indemnity. Concluding the definition the fundamentals can be encompassed in the words, that 'insurance is a protection from/against future probable losses'.

Meaning of Assurance

As mentioned above, insurance deals with prevention of loss and grantee of prevention of loss. Assurance is also a sort of grantee, which unlike insurance is provided on the basis of a rational existence of a fact. The grantee is thus not based upon any kind of probability, but instead it is based upon the true, material and rational existence of facts. The existence of a grantee, in both the definitions probably brings about the confusion. To summarize the defining dimensions of the term and word assurance, it can be said that 'an assurance is a grantee of a rationally and materially existent fact'. The term assurance in contractual sense is a guarantee of fact. Here there is a complete absence of probability and the grantee or rather the assurance is provided on the basis of rational logic.

Difference Between Insurance and Assurance

Let's have a war of the words, and see the points of difference where we might confuse ourselves between the two. Have a look:
  • Linguistic: Linguistically speaking, insurance is a promise of indemnity against a probable risk or loss, and involves a state of being insured. Assurance, on the other hand implies the grantee or promise of a rationally existent fact free from probability or possibility and any possible doubt.
  • Grantee: In contractual language, insurance is a grantee to protect from the probable future losses. Assurance on the other hand is merely a grantee of existence of fact, backed by rationality.
  • Contractual Use: An insurance is a contract where the insurer provides the insured with an indemnity or a protection from future loss. An assurance in a contract is chiefly an act of stating and guaranteeing the existence of a fact.
A common example for the explanation of the term insurance is of the insurance policy. The insurance company provides the client with and insurance against future loss such as in a case of an accident where the indemnity contract of auto insurance comes into play. Secondly, an assurance can be given that the coverage of the policy cannot go beyond say $20,000, which is the cash value of the policy.

For a very clear and reliable meaning which is free of perception and any interpretation, I would recommend you to use a good dictionary, especially if you are studying language, business or law.There are several more uses of these two terms. In fact in legal contracts, different types of insurance policies and legal language a combination of the two is often found in the same clause, due to their similar nature.

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