Things can change quickly from one moment to the next; for better or worse. Do you know how to be ready for the unexpected?
A life insurance covers from the comfort of your family to reach your financial goals.
When we talk about life insurance or burial insurance we are talking about insurance that covers risks such as death, survival and disability. Life insurance itself covers the risks that may affect the existence, integrity or health of people. Like all procedures that entail a legal agreement, for the insurance to be effective when required, an insurance contract must first be formalized.
Participating parties within an insurance or life insurance contract
The insurance contract or commonly known as an insurance policy must be made between two parties, which are; the insurer and the policyholder, who is the person who agrees or is signed to the contract, who is usually the insured, but does not need to be. Now, the insured is the person on whom the insurance or its coverage falls. On the other hand, the beneficiary is the person who, at the time the contract has to be enforced and said insurance has to be collected, will be compensated according to the conditions of the contract or policy.
Life insurance is legally seen and considered as a pure sum contract, which means that the insured sum is agreed and fixed between the parties, who in the case of this contract are; the policyholder and the insurance company, and this is agreed freely and voluntarily.
In insurance, in the event of death, it is common to find that in the life insurance contract, the policyholder and the insured are different, in this case it will always be necessary that the consent of the insured is expressed in writing, taking into account Of course, the laws of each country count, but in general it is the most common modus operandi, all this unless the interest of the insured in the existence of said insurance is evident. In the event of renouncing said insurance, the insurance company will completely stop and terminate the coverage of the risk, a fact for which the policyholder will have the right to have the premium paid back.
Types of life insurance
Risk or death insurance
When talking about risk or death insurance we find that they are a type of life insurance in which the contracted capital is paid immediately after the death of the insured in the event that this occurs before the end of the term. duration of the insurance. Otherwise, that is, if the person who is insured survives the period agreed upon within the insurance, it will be canceled, which is why the premiums will be settled in favor of the insurance company.
Now, within this category of insurance, there are two different types of risk insurance: term insurance and whole life insurance.
The temporary insurance/term life insurance are covering the risk of premature death before terminating the contract. Within this type of insurance, the risk component is well above other variables. Its duration is one year, but it is tacitly renewable until a certain number of renewals or periods are met. The cost of said insurance is generally not very high and on top of that it allows you to contract high coverage.
When referring to temporary insurance we also find that they are usually contracted to protect, among other things, mortgage obligations, guarantee of debt cancellation or just as an additional protection measure for the family.
Whole life insurance
On the other hand, when referring to whole life insurance we find that its coverage extends throughout the life of the insured permanently and without terms. In this case, compensation is paid immediately after the stipulated clause is fulfilled, which is the death of the insured, regardless of when this occurs.
It must also be taken into account that when talking about this type of insurance we find that there are two modalities: The first one refers to whole life insurance with lifetime premiums , in this modality the premiums will be paid during the entire life of the insured, which translates to continuous coverage. The second modality refers to whole life insurance with temporary premiums , in this modality, the payment will be made only for several years, or failing that, until the death of the insured.
When referring to savings or survival or retirement insurance, we know that their objective is to obtain capital at the end of the agreed term. The medium or long-term investment is what this type of insurance aims to do, this is done in this way to complement the retirement benefits or in case of wanting to accumulate capital that allows to face future situations.
The mixed insurance assert its name because it means that within a single contract mixture risk insurance and savings insurance is made. By doing this, the insured is covered in the event of death and in the event that this happens, the beneficiaries will receive compensation. At the same time, thanks to this type of contract, if you survive the age stipulated in the mixed insurance contract, you are assured of a benefit.
If we talk about income insurance we know that they are based on the contribution of a single capital or the payment of a premium, previously established and made during a specific time also previously established within the contract. The insured is guaranteed a life annuity which refers to the payment of amounts while he or she lives, said amount can be fixed or variable, it can also be a temporary income established for a certain time.
The life insurance contract obliges the insurer or insurance company to comply with a capital, an income or other benefits agreed to with the beneficiary. The above in the case of death or survival of the insured. It is important to know that life insurance can be contracted on one’s own life or that of another person, who will be referred to as a third party, it is also important to note that this same can be an insurance that covers one or more people.
Now that you have seen the different types of insurance that exist, you will know that there is more than one that can serve your needs, from protecting your family with financial support in case of failure, or supporting yourself in the future. which you can no longer work and generate the same money as before, in any case, it is always good to have insurance that supports your lifestyle and that of your loved ones, it is never too late or too early to hire one.