What Types of Life Insurance: This is all you have to know to choose the policy that best suits your situation,
Beyond all the tangential issues that surround our life, enjoying our family and close people ends up being always the most important. A point in which protecting them will also be fundamental, especially if we have children or people in our care who depend on our care and sources of income.
For that reason, and although sometimes it is not at all pleasant to think about unpleasant future scenarios, it is convenient to consider what could happen if we ever lack them. The function that fulfills a policy of life is to make these assumptions more bearable and, although it is not obligatory to count on it, it will be essential if we want to enjoy ours with the tranquility.
And it is that this type of insurance has the main objective of protecting our family or loved ones in the event that we have a misfortune. The idea is that the insurer will pay the beneficiaries a specific sum that, to a certain extent and at least from an economic point of view, compensates for the loss and all situations that may arise from the death of the client.
Previous considerations about life insurance
However, and beyond these general features, it is advisable to know some details and know exactly how an insurance of this type works, as well as what coverages and policies are best suited to our situation and personal characteristics. A point in which both our needs and income come into play, as well as the number of beneficiaries we wish to cover; among many other issues.
Before exposing the different types of life insurance that we can choose, it is necessary to review what we are talking about when we refer to this product. Basically, it is a personal policy that offers coverage on the risk of death of the insured as we have explained, and whose objective is focused on guaranteeing that the beneficiaries of the client receive an economic compensation in said conjuncture.
In reference to the parties involved in this insurance, we have, on the one hand, the insured – who is the one who acquires the coverage – and, on the other, the policyholder – who is the one who subscribes it and pays it -. Finally, we have the beneficiary, who receives the compensation when the circumstances contemplated in the contract are met so that it becomes effective.
What types of life insurance are there?
As it has been explained, there are different types of life policies that contain different options and different peculiarities that make it adapted according to the client that will hire it. These are its main characteristics.
In this case, the client can subscribe the policy during a specific period of time, that is, it is not a permanent term but a specific period that can vary from a few days, several years or until the client meets a certain age. These periods are designed to cover specific needs, such as going on a trip or with the aim of protecting the development of a risky activity or profession that, after a few years, will end.
As it is evident, if the insured does not suffer any mishap during the agreed period, the insurer will not pay any type of compensation. In any case, it is a very advantageous policy for young people, because it is usually cheap for this type of public and very burdensome for the elderly. Also, we must mention that this type of insurance has different types of premiums that the insured must pay.
- Increasing premium or renewable: it is a payment that is modified annually depending on the age the insured is reaching. The larger the insured person is, the more he will pay for the service, in reference to his higher mortality rate.
- Level or constant premium: in this case, the policyholder will pay more than what corresponds to his age for the first years in compensatory form, that is, to pay less than what he would play in the future.
- Decreasing premium: for, for example, bank loans. The beneficiary will be the bank itself and the insurer will pay the remaining payment that remains pending.
Whole life insurance
The main nuance that this type of policy presents is that the insurer would enter the compensation to the beneficiaries without taking into account the time of death. In addition, they cover for life and are intended to provide for the family or beneficiaries with amounts that compensate for the loss of income.
As for the premiums that can be chosen in this type by the insured, are the following:
- Lifetime premium: whose payment is made until the moment of death.
- Temporary premium: the payment is executed during a certain period of time, such as, for example, twenty or thirty years. However, insurance coverage would be available until death occurs.
Savings insurance or for survival or retirement cases
They are intended to provide the customer with a specific monetary amount at the end of the time period agreed in the contract. Its basis is the investment in the medium or long term and it is conceived as a kind of complementation of retirement or before possible disbursements made in the future.
It is one of the least known What Types of Life Insurance, but its usefulness is not negligible. It is a kind of hybrid insurance that has, within the same contract, risk insurance and savings.
In this way, the client will be covered in case of his death but, at the same time, he will be able to benefit from the agreed benefits if he survives the age stipulated in the contract. It should be noted that, if the first of these options occurs (dies), the beneficiaries will be those who benefit from the compensation.
In the insurances of rents the insured one will have guaranteed the annuity and formal when it realizes the payment of a single amount or of a premium during a determined term. For this first one (the life annuity) the payment is of a specific amount and is disbursed from the moment in which the policy comes to an end and while the insured is alive. The amount can be fixed or variable.
For its part, the temporary rent provides a fixed income for a specific period of time. With the comparator, you can find the most economical policy that best suits your needs in a personalized way and in less than three minutes.
Life Insurance Risk
The Life Risk insurance can be defined as a policy for the protection against the death of the insured of the beneficiaries that he chooses. The form of the premium can be annual, and the way to calculate it is based on three main factors: the age of the insured, medical history and the capital to cover.
The way to operate this insurance is based on the fact that if the insured dies, the beneficiary will obtain the capital marked in the contract, and aims to protect the latter in case the insured is missing. The policy is voided if it comes to an end before death can occur.