Can someone please explain to me the difference between the user license and IPSec license? When do you need which license? I tried looking for information about this question but seems like there is none.
The user license is more related to using the ASA as a firewall and specifies the number of user/hosts on the inside for which it will provide protection. The IPSec licenses are for the ASA as it provides VPN processing.
So you are more concerned with the user license when your deployment of the ASA is for traditional firewall protection. And you are more concerned with IPSec licenses if your deployment of the ASA is to provide IPSec VPNs. And you would be concerned with both types of license if your deployment did both firewall and VPN processing.