Section 72

What’s the difference?!

Is it life insurance or life assurance?

So, do you have a life insurance or a life assurance policy? Strictly speaking, you could have either. Each one is correct, but they are different things.


Life insurance refers to a product that will payout a lump sum benefit if you die during the term of your policy. An example of this would be your mortgage protection policy. If you die during the policy term, the insurance company will pay out enough money to clear the outstanding balance of your mortgage. If you do not die during the policy term, your policy will end and you will receive nothing. A term insurance or convertible term insurance policy is another example of this. We would usually set up a convertible term insurance policy to cover you up to your retirement age, but the conversion option would allow you to convert the policy into another longer term policy without having to provide any further medical evidence.

Life assurance will definitely pay out at some point. It is assured / definite that it will pay out on your death, whenever that may be. Life assurance is usually used to describe a Whole of Life policy. A Section 72 policy is a good example of this. This is just a whole of life policy that is written in a very specific way, using Section 72, to ensure the Revenue treat any benefit accordingly when it pays out. A whole of life policy WILL payout at some point – on death (so long as premiums are maintained and you were honest in your proposal form!)

Be careful of what a life assurance company means when it says ‘whole of life’. To some, this may mean, “well, so long as you die before the age of 80.” You may very well die before the age of 80, but thankfully, that’s not usually a guarantee! That is a life insurance policy, not a life assurance policy.

If you have any questions about any aspect of life insurance or life assurance, particularly in relation to your whole of life section 72 policy, please get in touch.

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