Insurance is generally used as a risk reduction tool. Life insurance is generally used to ensure that you meet your responsibilities to other people. If you have someone that depends on you to live, like a child, an old parent, you need insurance. If something happens to you, they will have some money for them to use. There are other ways insurance could be used. If you want a high return, insurance is not the way to go. Some suggests that getting “term” insurance and investing the difference.

Pension plans are used to plan for your retirement. The money that you put here will generally have a higher return and you should be able to use it when you are already retired. This should replace your current income when you will not be working any longer.

For a more detailed explanation, you can go to several financial planners to let them explain the difference. Don’t be ever pressured to buy from financial salespeople. There are also many information on the internet that are available you just have to read them and put in a little time.