Life insurance policies are a type of financial product that aims to economically protect the family of an insured person in case of death or disability. These types of services are provided by the insurance companies, who prepare a contract based on a previously stipulated amount, which passes to the beneficiaries. The final compensation of a life policy can be awarded in the form of a single payment or through fees.
There are 2 main types of life insurance. Some cover in case of death, and others in case of life where the insured is incapacitated; although you can also hire a mixed life policy. The first modality is known as Life Insurance Risk (death), and the second modality as Life Insurance Savings (life).
Basic concepts about life insurance
Before hiring a life policy, it is important that you know the basic elements that compose it and that we show you below.
- Premium :
The premium is the amount of money that the insured must pay monthly to the insurer to ensure that they meet the payment in case of death or disability. This amount corresponds to the total amount of the policy, and is usually calculated based on the level of risk that the customer represents for the company.
- Beneficiaries :
They may be natural persons or institutions responsible for receiving compensation from the insurance company. The beneficiaries can be several, and it is up to the insured to determine how much each person will receive. The client can also change the beneficiaries while he is alive and fulfills the established premium.
- Compensation :
Also known as a death benefit, compensation is the amount of money that the insurer grants to the beneficiaries after the insured has died or become disabled. The amount of money granted is usually tax exempt for beneficiaries.
- Deadlines and validity :
It is the time specified in the contract where the validity of the life policy is indicated. This section of the contract also shows the renewal or modification times of the premiums.
Tips for applying for life insurance
Apply the following tips to ensure you the best life policy.
- Keep in mind that the older you are, the lower the chances of getting a good life policy. If your life is short, the insurer may charge you more expensive premiums.
- Taking care of your health status is decisive for getting a good life insurance. The insurer sees people who suffer from illnesses or who lead an unhealthy lifestyle as a risk.