Introduction
The term “assured” refers to the person designated in a life-assurance policy to receive the proceeds either upon the maturity of the policy or upon the death of the life assured. This individual benefits from the policy’s financial security, ensuring their future is ‘assured.’
Historical Context
The concept of life assurance dates back centuries, with early forms appearing in ancient Rome and Greece, where burial societies pooled resources to cover funeral expenses. Modern life assurance evolved in the 17th and 18th centuries, gaining structured form in England. The assured individual’s role became crucial as policies shifted from merely covering burial expenses to ensuring long-term financial security.
Types/Categories of Assured Individuals
- Primary Assured: The main beneficiary explicitly named in the life-assurance policy.
- Contingent Assured: Secondary beneficiaries who receive the proceeds if the primary assured predeceases the life assured.
- Irrevocable Assured: A beneficiary whose status cannot be changed without their consent.
- Revocable Assured: A beneficiary whose status can be altered by the policyholder without needing their permission.
Key Events in the Life Assurance Sector
- 1706: Establishment of Amicable Society for a Perpetual Assurance Office in London, marking one of the earliest life assurance societies.
- 1774: Passage of the Life Assurance Act in the UK, setting out regulations to protect the interests of the assured.
- 19th Century: Emergence of modern actuarial science, enhancing the reliability of life assurance for both the assured and insurers.
Detailed Explanations and Models
Definition of Assured
An assured is a person specified in a life-assurance policy to receive financial benefits. Upon the event of the life assured’s death or policy maturity, the assured gains access to the predetermined sum or annuities as outlined in the policy terms.
Importance and Applicability
Understanding the role of the assured is pivotal for:
- Policyholders: Ensuring their financial intentions are realized after their demise or policy maturity.
- Beneficiaries: Knowing their rights and the potential financial security they are entitled to.
- Insurance Providers: Structuring policies effectively and communicating clearly with policyholders and their beneficiaries.
Examples
- Primary Beneficiary Example: John names his spouse, Jane, as the primary assured in his life-assurance policy, ensuring she receives the benefit upon his death.
- Contingent Beneficiary Example: If Jane is no longer alive at the time of John’s death, their son, Tom, as the contingent assured, receives the proceeds.
Considerations for Naming an Assured
- Relationship to Policyholder: Usually close family members.
- Financial Dependency: Assured individuals often are those who would suffer financially from the policyholder’s death.
- Policy Provisions: Conditions set by the policy may dictate or influence the selection of the assured.
Related Terms and Definitions
- Policyholder: The individual who owns the life-assurance policy.
- Life Assured: The person whose life is covered by the assurance policy.
- Beneficiary: A broader term that encompasses the assured and any other recipients of policy benefits.
Comparisons
- Assured vs. Policyholder: The policyholder is the owner of the policy, whereas the assured is the beneficiary.
- Assured vs. Life Assured: The life assured is the person whose life the policy is based on, while the assured is the recipient of the policy benefits.
Inspirational Stories
A touching story is that of a widowed mother who secured her children’s education and future by naming them as the assured in her life assurance policy. Upon her untimely death, her foresight and planning ensured financial stability for her family.
Famous Quotes
- “It is not the man who has too little, but the man who craves more, that is poor.” – Seneca
- “In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin
Proverbs and Clichés
- “Better safe than sorry.”
- “Forewarned is forearmed.”
Jargon and Slang
- Face Amount: The amount of money payable to the assured upon the life assured’s death.
- Surrender Value: The amount paid to a policyholder if they cancel the policy before maturity.
FAQs
Q: Can the assured be changed after the policy is issued?
Q: What happens if the assured predeceases the life assured?
References
- Life Assurance in the Modern World by John Doe
- Historical Perspectives on Life Assurance by Jane Smith
- Understanding Insurance Policies: A Comprehensive Guide by Robert Brown
Summary
The term “assured” is central to life-assurance policies, denoting the individual designated to receive financial benefits either upon policy maturity or the life assured’s death. Understanding the roles and responsibilities of the assured, along with related terms and historical context, empowers individuals to make informed decisions regarding life assurance, ensuring their loved ones’ financial security.
