Alexa Seleno

What is life insurance and what is it for?

Juil 10, 2023
What is life insurance and what is it for?

What is life insurance? This is a question that many Internet users and people ask themselves on a daily basis. Although we hear about it quite often on a daily basis, the very concept of life insurance is quite nebulous for many people.

As the insurance blog of reference for many of you, we had to come back to what life insurance is and the means you have to subscribe to it… Are you ready? We tell you everything!

What is life insurance?

To answer all those who ask themselves the question “What is life insurance?” », we can already say that it is a financial investment. Nothing to do with insurance in the sense we usually give it, life insurance being an investment that allows the insured to save money monthly with the idea of ​​passing it on to a beneficiary in the event of of deceased.

Life insurance is now mainly issued by banks and insurance organizations. These companies also present life insurance as an investment at a good rate, allowing you to benefit from advantages in terms of taxation, but also from better rates, whether for a mortgage or a consumer loan.

Why take out life insurance?

But then what is the point of subscribing to life insurance? Well, life insurance allows you to save throughout your working life in order to anticipate and finance your retirement. It is also the most widely used savings lever in countries with a funded pension system; France having a pay-as-you-go pension financing system.

Life insurance allows you to anticipate the financing of your old age, but also to finance a real estate project, the money placed on life insurance can be understood as a deposit by banking organizations during a mortgage.

Do not confuse life insurance and death insurance!

When you ask people on the street “What is life insurance?” “, many make the amalgam with death insurance. Indeed, if the objective of life insurance is to deliver capital to a beneficiary in the event of death, it must above all be considered as a real estate investment. Indeed, as seen above, life insurance very often has very advantageous rates allowing you to grow your capital until your beneficiary, or you yourself wish to withdraw it.

Because yes, it is possible to withdraw funds from your life insurance. This is called a life insurance buyout. We talk about partial redemption when you ask to release a defined sum to your bank, with the aim of buying real estate for example. We are talking about scheduled partial redemptions if you decide to regularly release an amount from your life insurance. These partial redemptions can thus provide regular income supplements, especially when retirement age comes.

How to take out life insurance?

To subscribe to life insurance, nothing could be simpler! All you have to do is make a request to your bank and invest some starting capital in your life insurance. This capital can be minimal at the base, what matters is the opening of your life insurance. This is called the down payment.

Once that down payment is made, your life insurance is up and running and your money starts working on its own. You can then make free additional transfers, i.e. payments when you see fit, and in the amount you want. Nothing obliges you to invest money on a regular basis in your life insurance even if it is advisable if you wish to benefit from a good capital at the time of retirement. You can also schedule regular payments on your life insurance, whether monthly, bi-monthly, quarterly or annually, as you see fit!

And here we are, we hope that this article devoted to life insurance will have allowed you to have answers to the question “what is life insurance? “. Anyway, if you have any questions, do not hesitate to consult our other articles on life insurance, and ask us your questions in the comments, we will answer as many of you as possible. . See you soon for new articles on our Insurance Magazine blog!

The magazine-insurance team of editors at your service! We look at all possible and imaginable information on insurance in order to help you sort it out. We strive to offer you quality articles to help you better understand the issues of this or that insurance.

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