Theoretically various scholars or insurance have tried to tell apart between both of these words;
First of all, some scholars said that the word insurance can be used only where the danger, through probability can be ascertain i.e. it could or might not happen at a specific amount of time in future.
Facts of indemnity are of this kind e.g. fire and marine insurance.
Second, a building may or might not catch fire; the ship may meet a disaster or may reach the port of destination safely.
In such cases;
The policy may not sure becoming a claim, while assurance must be applied to such contracts where in fact the policy is bound to become a claim i.e. where the danger insured against must happen sooner or later.
This really is so in life contracts. The person must die or must attain a particular age. The risk is certain. According to this view, the word assurance must be used for life contracts and insurance for indemnity contracts.
Third, another distinction attempted is that insurance arises from the insured while the assurance from the insurer.
In other words, the insurer assures the insured of his life or property while the insured insures himself against his life or property.
Fourth, Still another distinction drawn is that assurance denotes the principle where as insurance denotes the practice.
The above distinctions, though theoretically correct, but not hold well in practice.
By usage the terms are discriminate all over the world and it’s needless to be very particular about their use. In practice the terms have grown to be interchangeable.
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