Life Insurance: What You Should Know
Life insurance can be a great help to your loved ones in the event of a sudden absence or permanent disability. However, it is much more than that and offers benefits that many people are unaware of.
For example, it can be useful if you become ill and are unable to work, as it serves as compensation. Did you know? Furthermore, it is not only suitable for those suffering from terminal illnesses, as many imagine.
We have separated some essential information on this subject. Continue reading and discover everything you need to know about life insurance!
What is life insurance?
It is a contract between you and an insurance company, in which a person nominated by you (also called a beneficiary) may receive a financial amount in the event of your death.
In other words, life insurance acts as financial compensation to support the limbs of a deceased person. This way, it is possible to maintain your standard of living and even cover expenses related to death. This is the case with funeral costs and much more.
Along with this benefit, the insured can receive financial compensation in specific situations. One of them is temporary incapacity, which for health reasons, for example, prevents someone from working for a period of time. This benefit is especially recommended for self-employed professionals.
How does life insurance work?
You already understand what life insurance is all about, now is the time to find out how it works. That is, you can indicate as many beneficiaries as you wish when preparing this contract (also known as a policy).
As mentioned, if there is an accident or fatality with you, your loved ones will be supported and will be compensated within a few days without bureaucratic difficulties. There are several coverages that you can include in the policy.
Therefore, to provide the protection and constant benefits of your life insurance, you must define with an insurance company what you want or really feel the need to purchase. Among the coverages that can be included in life insurance are:
- coverage for natural death or accident;
- coverage for disability due to accident;
- payment of funeral assistance.
Why is it worth taking out life insurance?
Once you know the types of coverage included in life insurance, it becomes easier to understand whether it is worth taking out this service. That is, there are several reasons why you should take out life insurance. They are all based on the peace of mind you achieve when you know that your loved ones will be supported in the event of your unexpected absence. Find out more below!
Brings financial security
Possibly, the fear of unemployment, illness and death is a major concern for you. After all, how did your family members manage to maintain their standard of living without your financial support? To eliminate concerns like these and bring more security, it is very beneficial to take out life insurance.
In other words, what few people realize is that this type of contribution actually constitutes an excellent financial planning instrument for the family. Therefore, you may consider receiving compensation capable of supporting your family in your absence, whether for immediate or long-term issues.
Thus, financial issues such as immediate support and children’s education, among others, can also be resolved with life insurance. It is, therefore, financial security that should not be disregarded.
Wards off health problems
There are many health problems influenced by stress and anxiety. Did you know? This is the case with burnout syndrome, hypertension, depression and much more. Some of the main triggers for the emergence of these pathologies involve financial concerns.
So, by taking out life insurance and knowing that, in the event of death or illness, you and your family have financial protection, your worries end up becoming less.
Protects self-employed professionals
As you can see, life insurance is also beneficial for those who experience temporary disability and are unable to work. In the case of formal professionals, governed by the CLT, they receive compensation from the INSS.
However, the same does not happen with independent professionals, who need to organize ways to deal with possible problems on their own. One strategy for this is taking out life insurance. After all, you have already seen that it compensates you during this moment.
In any case, when taking out life insurance, be aware of the different possibilities and coverages it offers. With this, you will have the product you need and in the conditions that suit your reality.
Provides personal protection
As mentioned, life insurance is not a contract limited to the death of the insured. Its protection can also cover cases of accidents that create a condition of permanent disability for the insured, preventing them from exercising their ability to work, and consequently compromising the family’s livelihood.
In this case, the compensation goes to the insurance holder (the person who buys it) and not to anyone else, and the benefit can be used during life.
Provides support to family members
Regardless of your longevity expectations , sudden absence can bring immediate demands that the people you love need to meet. Therefore, there are other situations for which the family needs to be supported:
- medical expenses resulting from the occurrence of an accident;
- expenses with funeral bureaucracy;
- children’s school expenses.
Excellent value for money
The compensation value guaranteed by a life insurance policy will depend on the definitions and coverage that the insured person defines when contracting. However, life insurance presents a very favorable cost-benefit ratio for the interested party, as, as a rule, the amount agreed is much higher than the amount paid monthly.
What are the main types of life insurance?
As seen, there are numerous advantages when taking out life insurance. There are three main types of them. Check out!
Individual life insurance
As the name suggests, insurance coverage is only for the contractor. Therefore, it is advisable for those who do not have or do not wish to include benefits in the plan.
Redeemable life insurance
In this type of insurance, the contractor has all the protections of a traditional plan. The difference is that he chooses the period in which he will pay for the resource. Thus, when the term ends, it is possible to redeem the amount paid over the years.
Family life insurance
It is aimed at including benefits in the plan, such as children, spouses, etc. In this sense, it works in the same way as individual life insurance.
Care when hiring
Like any contract, insurance creates an obligation for the contractor that must be fulfilled without delay, under the risk of losing the rights guaranteed by the policy. Therefore, the contractor must take some care so that the insurance meets the needs of their dependents and its contract fits within the family’s budget.
The first thing you should do is look for a good, experienced and trustworthy insurance company. She will be able to recommend the best products available on the market that meet your family’s real needs.
It is essential to know the possibilities and coverage available, as well as the final composition of the price to be paid. Define your needs and only hire what is really necessary to protect your family. Understand the importance of carrying out a life insurance simulation .