Many people think that life insurance is expensive or that it only comes at the time of death, and no one likes to think about it. But the truth is that life insurance has many advantages and helps both the holder and his family.
With this type of insurance, you and your beneficiaries will be able to count on resources at times of difficulty, so they can keep plans for the future and be more protected against adversity. After all, we never know when an unforeseen event will happen, right?
So to help you understand if it is worth having a life insurance, we will explain everything about it here, for example, what is life insurance, its advantages, types of insurance and more. Check out!
What is life insurance?
Life insurance is a type of service that you hire from an insurance company to ensure financial protection for you and your family or dependents.
It consists in the payment of an indemnity in case of fatal situations or other serious occurrences that have not led to death.
So it benefits you both in the case of a serious illness or permanent disability as your family gets financially protected in case something unexpected happens and interrupts your income.
Insurance can be done for one or more people and there are several coverage options, which depend on the type of plan hired.
Prices vary according to the plan and are paid monthly. It pays to research well and assess which insurer has the most suitable offer for you and your pocket.
How does life insurance work?
Life insurance is offered in the form of plans with different types of coverage and the greater the degree of risk chosen, that is, the number of risk situations chosen, the higher will be the monthly fee charged by the insurer.
Insurers call the monthly payment of premium insurance and it is free of Income Tax.
To ensure the safety of the money and of those who have contracted the insurance, all insurers are regulated and supervised by the National System of Private Insurance – CNSeg.
The insurance contract stipulates the obligations of the company and, generally, for the contractor as well, which undertakes to:
- to pay the premium;
- notify the company if you already have other insurance contracted;
- always notify the insurer when unforeseen events occur;
- risk situations that are not covered by insurance.
The contracting of life insurance is required in case of a loan signed with a bank, especially in the case of high values, contracted for example, for purchase of residence.
In this case the insurance is temporary, but may be renewed until the end of the loan.
Types of life insurance
There are the Individual Life Insurance and Collective Life Insurance policies, known as Group Life Insurance, and we will explain each of them for you to follow.
Individual Life Insurance
Life insurance covers the risk of only one insured individual, who is responsible for hiring and defraying the plan.
This insurance is customized according to the characteristics of the person, such as age, marital status, sex, profession, lifestyle and health conditions.
The price, or premium, is calculated based on this information, since the coverages, which are the guarantees, term, insured capital, term and form of payment are fully negotiable between insured and insurer.
Collective Life Insurance
The collective life insurance, known as group life insurance, refers to the contracting of a collective policy made by a company, professional association, union, class entity or club to insure the persons linked to these institutions.
In the case of this type of insurance, the contracting institutions are called stipulators and they define the conditions of the plan, such as guarantees, period of validity, insured capital, maximum age, form of adjustment of the premium among other conditions.
In this type of insurance there is no direct negotiation with the insured, so he enters an existing policy through a membership proposal and receives a certificate with a summary of the contractual conditions.
The forms of costing of collective insurance are three:
- non contributory : the stipulator is totally responsible for the cost of the plan.
- totally contributary : the insured are responsible for the full cost of the plan;
- partially contributory : the insured and stipulator pay the plan in the agreed proportion;
Top questions about life insurance
Insurance is expensive?
Insurance is not expensive, in fact, it offers protection to families with different levels of income, especially those who have little or no equity or financial reserve.
It is an investment for the future and can cost less than 10% of the amount spent annually on auto insurance policies.
In which situations is life insurance indicated?
Hiring insurance to protect yourself and your family is recommended in a number of situations, for example:
- Financial protection for you and your dependents;
- Speed in receiving the indemnity;
- Exemption from Income Tax;
- Funeral expenses.