You should avoid early surrender of assurance products at all costs, as the surrender value can be quite low until the end of the policy. The main advantage of assurance policies is the security of knowing that a financial nest egg will be available to your family and loved ones in the event of your untimely death. There are a number of typical insurance products that are designed to manage the risk associated with property, motor, travel and health. The insurance company will insure against specific risks and in the event of a valid claim, will make good your financial loss. Insurance and assurance products can be paid for either by regular weekly or monthly premiums, or a once-off payment at the start of the term.
Insurance is usually for one year, but renewable by mutual consent.
Assurance is usually for a longer term of five, ten, fifteen or twenty years. Finally, there are some basic types of assurance product that are important to understand. Term Assurance runs a fixed number of years, normally at least five years. It is designed to manage risk during a window of time, perhaps when your family is about to go to college. Your broker will provide a recommendation for a suitable level of coverage based on your income, age and personal circumstances.