A death is often sudden, and can leave loved ones particularly destitute. From a financial point of view, the consequences can even be disastrous if nothing has been thought of to protect the loved ones of the deceased. A solution exists to avoid this situation: take out life insurance. You can also read this article if you want some additional tips on the subject.
First and foremost a pension contract
Death insurance falls within the domain of provident insurance, which means that the insured risk is the death of the insured. When you take out your contract, you will designate one or more beneficiaries.
You determine at this time the duration of your contract, and the amount of lump sum that will be paid to your loved ones if you ever die before the end of the period indicated. For more details on this point, check out this article. If ever, at the end of this date, the insured is still alive, no capital will be released. It should be understood that it is not a savings contract, but rather an insurance contract which guarantees a risk: your death.
The principles of the contract
You will have to make contributions on a regular basis. These will feed your capital throughout your death insurance contract. This is to emphasize one point: you cannot recover this capital during your lifetime, in other words, the release of the capital is only effective upon your death.
Also, if the risk does not materialize, you will have contributed for nothing. Only certain insurers offer their insured a reimbursement of the shares of the contribution, such as Maif, provided that they have been insured with them for more than twenty years. The capital is only released during your lifetime, during the contract period, in the following special cases:
in case of disability
in case of loss of autonomy
In which case to subscribe to this contract?
Death insurance is particularly useful for couples in which one of the members does not work, and even more so if the couple has dependent children. Similarly, this precaution may be useful for married people who have a large age difference and one of the partners is likely to die earlier than the other.
In addition, unmarried couples are particularly concerned by this guarantee, because the remaining partner will not be able to claim a survivor’s pension. To know more, it’s this way.
How does it work?
If you wish to take out life insurance, you will then have to determine the amount of capital to be insured. It is therefore a question of calculating the financial consequences that a death can cause within a household. Once you have made your calculations and estimates, all you have to do is pour in your financial effort every year.
Life insurance contracts are generally offered by banks, but you can also go through insurance brokers who offer these services at a lower rate. One thing to remember: the older you get, the higher the insurance premiums because the risk of death is increased.
Take the time to find out and compare the offers
Before subscribing to a death insurance offer, take the time to do your research. Indeed, it is a question of knowing the precise conditions under which the capital is transferred.
For example, some insurances plan to pay back the capital only in the event of accidental death due to an external cause. In this way, cardiovascular or cerebral accidents are totally excluded from the contract. A point to watch out for.