Those on life are insurance policies that aim to provide financial support services aimed at the person . Their functioning is in part similar to that of car insurance; the insured is required to pay an annual premium, which in some cases, however, can be paid in installments on a monthly basis, which is proportional to the risk coefficient of the insured himself.
But while in the case of an auto policy the cost of the insurance is linked to the applicant’s driving history, with a life policy the risk coefficient for the insurer (and therefore the premium) can be linked to the age of the insured, to his lifestyle as well as to economic factors such as his income.
Having said this premise, it is easier to explain the scheme according to which life policies work: there is a contractor who is the one who undertakes to pay the cost of the premium year after year, there is the insurance company and there is the beneficiary (or beneficiaries) who will obtain the aforementioned financial support from the company following the occurrence of well-defined events in the life insurance policy stipulation contract.
What are the main types of life insurance policies?
But what are these events? They are closely related to the type of life insurance policy you choose. In general, however, it is possible to say that there are three basic types : life insurance with reimbursement in the event of death, in the event of life and mixed insurance.
Life insurance policies that cover the event of the insured’s death provide for the payment of a certain amount of money (compensation) in the event of the insured’s death. As mentioned, this sum is paid to the beneficiary or beneficiaries, as indicated by the insured in the contract. The sum can be disbursed in a single tranche on the death of the insured, or it can provide for the administration of smaller amounts, a sort of “pension” for a defined number of years. Life insurance is usually chosen by those who want to ensure financial support for their children or spouse in the event of their premature death.
On the other hand, the policy for the life case provides that the compensation, as mentioned above, always in a single tranche or monthly installments, is paid to the same insured person upon reaching a certain age. In this case, there are no specific definitions of extra compensation in the unfortunate event that the policyholder disappears before reaching the age of collection of the policy.
To avoid these intermediate situations, the mixed life insurance policy was invented which provides for both the presence of a supplementary pension in the event that the insured reaches a certain age defined in the contract, and compensation to the beneficiaries in the event of the insured’s death .
There is also a particular type of life insurance or the Ltc policy which guarantees economic support in the event of non-self-sufficiency.
Should you take out a life insurance policy?
The answer to this question is definitely yes, and for several reasons. One reason is linked to the fact that it is possible to easily find advantageous offers on the market, for example by calculating an estimate on the life insurance policy on the internet and thus finding the best life insurance companies on the market. A piece of advice? Take a look at life insurance policies online ; they have the same reliability characteristics as the best life policies provided by traditional insurance companies but, since they are sold directly online without additional costs for the companies, they involve decidedly lower costs.
Costs aside, another good reason to take out a life policy, especially one for the life case, is linked to the fact that through these products it is possible to guarantee economic support at the pension level which becomes even more necessary in a system where state pension is becoming increasingly scarce and the age at which one is entitled to social security is moving further and further.