(a) Differentiate between whole life and endowment assurance.
(b) State five uses of life assurance.
(c) List and explain two benefits covered under life assurance.
Explanation
(a) A whole life assurance: Is a type of life assurance policy where the sum assured is payable only when the life assured dies within the period of insurance while in endowment assurance; the sum assured is payable either. at maturity or at the death of the life assured within the policy duration.
(b) Uses of Life Assurance:
(i) Provision for retirement.
(ii) It is -taken for investment.
(iii) It is used as collateral security.
(iv) Provision for one's children education.
(v) It provides monetary estate.
(vi) It caters for welfare of the family.
(vii) It serves as savings
(viii) It is used to augment pension.
(ix) Premium issued for tax relief.
(x) It is used for loan repayment.
(xi) It offers financial protection against sudden death.
(xii) It offers financial protection against disability.
(c) Benefits covered under Life Assurance are:
(i) Death benefit
(ii) Maturity benefit.
Death Benefit: This is the amount payable to the beneficiaries or personal legal representatives of the life assured in the event of the death of the life assured.
Maturity Benefit: T his is a. benefit payable to the assured in the event of the survival of the life assured up to the maturity of the policy.