Life insurance is a contract of assurance as it provides peace of mind to both the policyholder and their loved ones. In essence, it assures the policyholder that upon their demise, their family members will receive a predetermined amount of money to help them continue with their lives.

Life insurance contracts are typically long-term agreements between the policyholder and the insurer. This means that the policyholder pays premiums to the insurer over a specified period, and upon their demise, the insurer pays out a death benefit to the policyholder`s beneficiaries.

One of the primary reasons why life insurance is considered a contract of assurance is that it provides security and protection against unforeseeable events such as accidents, illnesses, or death. Life insurance can help to ease the financial burden on the family members left behind and provide them with a steady source of income in the future.

Another reason why life insurance is important is that it can help to pay for final expenses, including medical bills, funeral expenses, and outstanding debts. This can be especially beneficial for families who may not have enough savings to cover these expenses out of pocket.

Additionally, life insurance can be used as a tool for financial planning and investment. Many types of life insurance policies, such as whole life or universal life insurance, offer cash value accumulation over time. This can be used as a source of loan collateral or to supplement retirement income.

In conclusion, life insurance is considered a contract of assurance because it provides security, protection, and peace of mind to both the policyholder and their beneficiaries. It can help to ease the financial burden of unforeseen events and provide a steady source of income for loved ones in the future. Life insurance can also be used as a tool for financial planning and investment. Therefore, it`s crucial to consider getting an appropriate life insurance policy that suits your needs.