Whether we like it or not, we have to realize that we are all going to die one day and that we will leave a void in the hearts of our loved ones. Today, many people choose to purchase life insurance. Why ? What does it cover? To find out, read this article until the end.
What is death insurance?
Death insurance is a type of investment that allows one or more beneficiaries to receive a capital on the death of a loved one who has subscribed to it. This allows bereaved people to cope with the loss of a loved one, on a financial level. In other words, it is a provident contract which aims to protect the loved ones of the subscriber.
Good to know : the age limit for taking out life insurance depends from one insurance company to another. For some, the maximum age is 60, while for others it is 70. It is therefore necessary to first check with insurance companies before carrying out any type of process.
Is it used to finance the funeral and the funeral plaque?
As a rule, the beneficiary of a death insurance only receives the amount of the payments made by the subscriber. He is free to use the capital as he sees fit. But it is also possible that the subscriber has a specific contract to cover his funeral. In addition to the organization of the funeral, the minimum that the beneficiary can do to pay tribute is to choose a funeral plaque for their deceased loved one, because it is an extremely respectful gesture. In particular, it allows families and friends to keep the memories of the moments they spent with the deceased until the end of time. To put it simply, a funeral plaque is a symbol of attachment to the deceased.
The different types of life insurance contracts
There are two life insurance contracts: term death insurance and whole life insurance. Whole life insurance is a contract for an indefinite period, which means that the contract does not end until the death of the insured. It allows loved ones to be sheltered from want for a long time. For example, it allows children to have enough capital to be able to complete their studies in the best conditions, because the amount of premiums is higher. Note that this type of contract allows you to buy back your funds during the contract, as long as there is a clause attached to it.
Temporary death insurance has a fixed term. In the event that the insured dies during the period of the contract, the insurance company undertakes to pay the beneficiary the capital. However, if he does not die, the contract automatically ends and the insured loses his premiums. Fortunately, it is renewable for a period of one year. However, the beneficiary benefits from the contributions paid by the insured. In general, people use this type of contract to repay loans or finance their children’s education. For the first case, the duration of the temporary death insurance is equal to the duration of the credit.
What are the guarantees of death insurance?
Note that if you are the beneficiary of death insurance, you will be covered on certain points:
- Disability. Death insurance offers, in fact, a disability guarantee which allows the subscriber to be covered in the event of an accident or illness which has resulted in significant disability, thus preventing him from working properly.
- Temporary incapacity for work or ITT. This guarantee lasts 36 months and allows the person who has subscribed and who cannot temporarily work to obtain an annuity thus allowing him to keep his head above water.
- Education: as mentioned above, life insurance contracts are used to pay for the education of the deceased’s children so that they have the chance to have a better future.
You will understand, except in predefined cases, a death insurance does not directly cover everything related to the burial and funeral, that is to say the funeral plaque, the ceremony and the stele. On the other hand, beneficiaries can use part of the capital they receive to pay it.
In which cases the capital of the death insurance is not paid to the beneficiary?
You should know that the payment of the capital may not be made in the event that the insured committed suicide or died following an accident related to alcohol or other illicit substances or even his murder orchestrated by the beneficiary .
Once again, you have to check with insurers and be aware of each clause in the contract. This prevents you from having unpleasant surprises.