Life insurance is a forecasting and financial planning tool that can cover not only the risk of death but also other important contingencies that may occur and reduce the quality of life of both the insured and their family.
There are two types of life insurance:
Life insurance savings
It is aimed at those who want to accumulate savings that allow them to have some income in the future, as is the case of retirement savings, in which these additional incomes would serve to complement the public Social Security pension. The policyholder of savings life insurance can be any person over 18 years of age, who must pay certain premiums on which the income that they will receive later will be structured and which will incorporate the profitability that has been offered at the time of contracting it.
One of the most popular ways to take out savings life insurance is through what is called the Individual Systematic Savings Plan (PIAS). It offers very favorable taxation as long as at least five years have passed since the first contribution. If it is perceived as a life annuity, 92% of it may be exempt from taxation, depending on the age of the insured.
Risk life insurance
This modality ensures a capital or an income in the event of the death of the insured, guaranteeing those who have been designated as beneficiaries the payment of the agreed benefit if the insured dies before the end of the contract. In the event that the insured survives the expiration date of the contract, it would be terminated without any consideration from the insurance company.
Risk life insurance can also cover contingencies that may cause a loss of income, such as:
this coverage is one of the most common with which many people complement their Life insurance. When the person affected is unable to continue carrying out their professional activity, the insurance guarantees a benefit with which to make up for the lack of income during the period of time covered by the contracted coverage.
life insurance can also offer coverage to its policyholders when they become seriously ill.
When to take out insurance
Risk life insurance is especially interesting from the moment you start working, especially to cover situations that affect income and prevent you from addressing certain expenses or maintaining the desired standard of living. It is almost essential for those workers with families whose income is the sole or main breadwinner for the household, since the death of the household would leave their loved ones in a situation of vulnerability.
The philosophy of savings life insurance is aligned with that of any action aimed at saving for future retirement: you have to start as far in advance as possible (ideally with your first job), constantly and without rejecting small contributions, which They are often seen as not very useful and yet are of key importance in the long run.
Additional coverage in life insurance
You can add different guarantees to your life insurance. In this case we are going to point out the 3 most important ones, although depending on the insurance company you can also contract other additional services such as double or triple capital, repatriation, online will…
- Coverage for permanent or temporary disability: This is an addition that covers the risk that due to illness or accident, whether at work or personally, the insured may not be able to continue with their work or professional activity.
- Critical illness coverage: This is another risk that can be included in insurance. The insured is covered in the event of suffering a serious illness, for example, cancer. . It is a coverage that does not usually appear in policies for older people, since they are more prone to suffer from these diseases.
- Coverage for disability or death due to accident: Many life insurances offer extra compensation for death or disability due to an accident. It is a special type of coverage, since if certain conditions are met, it can be double or triple the main guarantee. For example, if the insured dies in a traffic accident, the beneficiary may receive triple compensation.
It is important to think carefully about the type of coverage you prefer for your life insurance, since the risks can be varied depending on your personal and professional situation.