Life insurance, or life insurance, is insurance that covers the risk of death, disability, survival, and incapacity. Do you know someone who has recently died or fallen ill with cancer or had a heart attack? Do you have a friend who suddenly died? Life is wonderful, but it is also abrupt and unexpected. You make plans and suddenly you can’t keep them. Life insurance protects you, your family, or your business partners from the financial consequences of death, disability, or serious illness.
Types of life insurance
RENEWABLE Term Life Insurance
It is renewed annually and the price depends on the profession, age, and state of health.
These policies are the most sold and, in our opinion, the most beneficial for the insured.
LEVEL premium life insurance
In a level life insurance policy, the premium initially set is higher than it would be if it were a natural one so that capital is “accumulated”. The period can be from 2 to 30 years, without the possibility of renewal, which can cause very serious harm to the insured, if during the term of the policy he or she is diagnosed with a serious illness since once the agreed term is reached, it cannot be extended.
Term life insurance AMORTIZATION
This type of insurance is used to cover debts or credit purchases, and the capital insured decreases as the loans are repaid.
In these cases, the beneficiary is always the creditor, and therefore no capital is left for the family or the contracting party. For example, guaranteeing loans (for studies) or mortgages, purchasing goods, etc.
Guarantees and Coverages in Life Insurance
The coverage to be contracted will depend on the profession; the higher the risk level, the more coverage.
Death
Primary coverage covers death from any cause including suicide after the first year.
Death by accident
This includes compensation for losses arising from extraordinary events in Spain. The beneficiaries indicated in the life insurance policy will receive double the contracted capital in the event of the death of the insured due to an accident.
Death by a traffic accident
The beneficiaries indicated in the life insurance policy will receive three times the insured amount in the event of the death of the insured as a result of a traffic accident.
Absolute and Permanent Disability
If the insured cannot carry out any paid activity due to an irreversible physical and/or mental situation, he/she will receive the insured capital.
Absolute and permanent disability due to accident
In the event of an accident resulting in permanent and total disability, double the amount insured for disability is compensated.
Absolute and permanent disability due to traffic accident
The insured will receive three times the amount of the capital in the event of total and permanent disability as a result of a traffic accident. For example, a hauler will have a higher risk of a traffic accident than an administrative worker, so it would be advisable to take out triple capital coverage for “Traffic Accidents”.
Serious diseases
Very important coverage, since according to the Spanish Association Against Cancer, breast cancer has become the most common tumor among women, with 27,000 cases each year.
The article “ The socio-economic impact on women with breast cancer: 61% of those who do not work believe it is due to the disease ” reflects the brutal economic results of suffering from a serious illness such as cancer.
A fact worth highlighting: “A report from the Hospital de la Santa Creu i Sant Pau estimates that 87% of women who worked left their jobs after being diagnosed.”
Additional coverage in life insurance
These additional coverages can be contracted in life insurance:
- Online will: Will before a notary and legal advice on living wills, leave your last wishes in writing.
- Digital deletion of the deceased on social networks.
- Telephone medical advice: 24 hours a day, 365 days a year.
You can also enjoy video medical consultations through our app.
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Telephone legal consultation: our network of lawyers will advise you
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Second medical opinion: you will be able to face your health problems with more confidence.
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Cardiac rehabilitation: allows access to a complete rehabilitation program in case of heart disease.
What capital should be taken out of life insurance?
Capital in life insurance for death
The recommended capital will be the result of multiplying your annual salary by 5 and adding the debts you have: personal loans, mortgages, etc. For example, if we have a salary of €20,000/year, and a personal loan of €20,000, we will ensure a capital of €120,000.
According to statistics, it takes a family 5 years to recover from the economic impact suffered after the loss of the deceased’s income.
It also calculates the needs of the survivors, that is, family burdens: if you have minor children or elderly people in your care, what they may need to cover.
How many life insurance policies can a person have?
The answer is simple: as many life insurance policies as you want to take out. It is common to have several life insurance policies taken out with different beneficiaries. For example, you can have a life insurance policy with the bank and another with an insurance company to protect your family (a life insurance policy with the bank is 40% more expensive than with an insurance company).
A Grandfather can have a life insurance policy with each of his grandchildren as a Beneficiary, and thus leave them a capital amount in direct inheritance.
What is the affidavit in life insurance?
Health status and the affidavit
As we indicated when we explained the sworn statement for taking out a health policy, it is important to fill out the health questionnaire correctly, especially if we suffer from any chronic illness or disease.
It is a questionnaire in which the insurance company asks you a series of questions regarding your medical history and illnesses before taking out your life insurance.
What is the best life insurance? Which life insurance is best?
In our opinion, as far as types of life insurance are concerned, renewable life insurance is the one that offers the greatest guarantees since it allows you to renew it or not, with a price that suits your needs and age and without a defined term that could harm you as could happen with those that already have an established deadline.
There are many insurance companies; compare prices, coverage, and additional guarantees, as well as the solvency of the insurance company and the professionalism and ethics of the Insurance Agent.
As for coverage, a comprehensive life insurance policy should include death and serious illness, as a minimum, and add, depending on your economic or professional needs, the following coverage:
- Accidental
death coverage includes Compensation from the Consortium, which compensates in the event of death, permanent disability (partial, total, or absolute), or temporary disability based on the amounts provided for in the policy. - Death due to traffic accident
Additional coverage of death due to traffic accident insurance is advisable for transport professionals, for example. - Permanent and Total Disability
Again, if we are transporters, taxi drivers, or commercial agents, to give an example of professions that travel often, it would be advisable to include this coverage, and even extend it with a double or triple guarantee in the event of an accident or traffic accident. - Critical Illness.
Unfortunately, we all know someone who has suffered cancer, a heart attack, or a stroke. Critical illness life insurance helps you cope with the loss of income and focus on what matters most: your recovery. This is essential coverage, always.