What is life insurance and what is it for?

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What is life insurance and what is it for?
What is life insurance and what is it for?

No one likes to think that something bad is going to happen, much less to ourselves or our closest relatives or acquaintances. But the truth is that accidents happen when we least expect them.

For this reason, and to fully enjoy life, the most advisable thing is to be able to be forewarned before the time comes.

And the best way to deal with life’s uncertainties is with good, comprehensive protection. So keep reading because, next, we are going to explain what life insurance is and what it is for, and what benefits it can bring you.

What is the insurance of life?

Life insurance is the guarantee of being able to improve or sustain, our economy, or that of our family, in the event of death or disability.

That is to say, there are many types of life insurance, but, although each one has its specific coverage, its main one is life itself, survival, or disability.

When a person is contracting a life policy, he is guaranteeing that if something happens to him, whether it is permanent disability or death, his beneficiaries will collect the amount of money contracted to be able to face the events that happen at the moment.

There are 3 figures within the life policy. In the first place, the policyholder is the one who contracts the insurance. This person can make the contract for himself or a third person. It is also the person who will be in charge of making the monthly, quarterly, or annual payments.

Second, there is the insured. Coverage will fall on it. And finally, the beneficiaries. The latter must be specifically specified since life insurance is not associated with the testamentary appointment. The beneficiaries are the ones who will collect the agreed money in case of death and they do not have to be the same as the heirs of the deceased.

To know what life insurance is and what it is for, it is also important to be clear that it is based on a private contract between the interested party and the insurance company. And although it is highly recommended to have it hired, it is not mandatory.

Its validity is renewable annually and its expiration becomes effective at the moment in which the agreed installments are not paid. Some companies do not set age limits for hiring, although the common is between 18 years and 65 or 80 years.

Finally, it is essential to know that for a life policy to be effective, the insured must fill out a medical questionnaire and even, if necessary, undergo a medical review by the insurance company.

What is life insurance for?

Knowing what life insurance is and what it is for is essential to understand the need to have one. Once this point is understood, it becomes fundamental for any person.

With life insurance, it is possible to guarantee the stability of income in a family in the event of disability or death.

Let’s take an example to make it clearer. Imagine a common family of four members. Parents and two children, for example, 12 and 14 years old. One of the parents suffers an accident that causes permanent disability and, therefore, the recurring income that she received monthly ceases to be effective.

Even if Social Security awards you a permanent disability pension, the amount you will receive will never be the same as when you were active.

Luckily, this family had contracted life insurance and, when this situation occurs, the family receives, either in a single payment or monthly or quarterly, the amount that had been contracted. In this way, the economic stability of the family is not affected, and they can continue to cope with their lives and their new circumstances with more ease.

The other assumption would be that one of the parents died. The remaining members would receive the agreed amount of money and thus be able to cover all the expenses associated with the death. They could also maintain, within the circumstances, a rhythm of life similar to the one they had up to now, and deal with the possible debts contracted by the deceased.

What does life insurance cover?

Now that you know what life insurance is and what it is for, let’s move on to coverage.

Life insurance coverage will depend on the type of policy that has been contracted. There are the most basic to the most complete, and their coverage will depend on what the client has requested. Some of them are:

The most basic coverage of life insurance is death

This is a common factor for all. Funeral expenses are usually included in this coverage and the capital that the beneficiaries will receive will depend on the conditions that have been contracted. The causes of death are also contemplated in the policies. If it is due to natural death, illness, or accident.

Absolute permanent disability

Some life policies also ensure absolute permanent disability, regardless of the cause that caused it, as long as it is included within the conditions of the insurance. In these cases, the person who would collect the compensation would be the insured himself.

Double or triple capital for the accident (or traffic)

Some  NPI number life insurance policies include, among their coverage, double insured capital, in the case of disability due to an accident, or triple capital if the disability is the result of a traffic accident.

total permanent disability

When the insured cannot continue carrying out their usual work.

temporary permanent disability

When the insured cannot carry out their work for a certain time due to any of the causes included in the policy.

What benefits does life insurance have?

The benefits of life insurance are what tip the balance towards contracting the policies. The main one of all is, without a doubt, the peace of mind that they provide to the insured knowing that, if something happens, both he and his family would be covered. And, in addition, below, we explain some more to take into account;

  • Depending on the case, the insured or his beneficiaries receive compensation at the time.
  • Compensation for life insurance is not subject to seizure and is not associated with the will, as long as it has been made before the policy.
  • The capital to be received, in the event of death, is not subject to the payment of IRPF or Inheritance and Gift Tax.
  • As self-employed, you can deduct up to 500 euros for the premiums paid for life insurance.
  • The policies can be modified over time and adapted to the real situations of each moment.

What types of insurance do we have at Aegon?

We care about you, your family, and your peace of mind. For this reason, we offer you different types of life insurance that adapt perfectly to your real needs.

Hopefully, you never have to use them, but, if necessary, you can rest easy because we will take care of the situation.

In addition to the special conditions of each of them, you should know that they all have in common the advance payment for burial expenses, the online will, psychological care, legal assistance, and 24-hour telephone medical advice.

  • Aegon Essential Life. At an accessible price for all budgets, with the hiring of this policy, you will be able to ensure the future of your family in the event of your death. In addition, you will also be covered in the event of a diagnosis of serious illnesses.
  • Aegon Full Life. For less than 10 euros per month, ensure coverage for death and absolute permanent disability.
  • Aegon Extra Life. With coverage for death, permanent and absolute disability, and double capital due to an accident.
  • Duo Life Insurance. Life insurance is designed for couples where family protection is the key.

Now that you know in depth what life insurance is and what it is for, take matters into your own hands and protect your well-being and that of your family. As you have seen, it is essential to be able to lead a quiet life and be prepared for any unforeseen event.

At Aegon Seguros we are here to help you, assist you, and advise you. So do not hesitate and call us. We will advise you on the type of policy that best suits your needs.

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