Although people have been using these terms interchangeably, there is a subtle difference that exists.
An insurance policy insures a person or a property for a certain sum of money and claim can be made only IF the event (death or accident) takes place.
An assurance policy pays a certain sum of money on the death of insured or reaching of certain age. Assurance policies are applicable only to life. They are also investment instruments apart from being insurance.
Our finance prof in IIMA pointed out the paradox in India where we have LIC and New India Assurance where it should have been the other way round.
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