Life Insurance: how to select the best one?


Life insurance is a contract that binds the policyholder, who commits himself to the daily payment of an amount (premium).

On the other hand, the insurance company is ordered to pay capital in case the event or circumstance whose commitment is the object of the coverage occurs.

The primary option for life insurance is that payment of the amount agreed in the contract is dependent on the death or survival of the insured.

This type of plan seeks to give the insured peace of mind in the event of a claim. Also to give the relatives some kind of compensation in case something serious happens to the policyholder.

There are many types of life insurance, so you should know the ones that are mainly offered.

Types of life insurance

In this type of insurance, it is favorable to delimit the criterion of:
Insured, on whose life the payment of the capital depends.

Policyholder, who is the one who takes out the insurance and pays the premium (may fit in with the insured).

The Beneficiary, who is the person who will receive the capital stipulated in the policy.

The most accepted arrangement, in terms of functionality of the life insurance intention, is the following:

Death insurance

It is recurrent that they are also called commitment insurance. If the insured dies before the end of the contract, the beneficiaries designated in the policy are guaranteed payment of the contracted capital or rent.

If the insured party arrives alive at the end of the contract, it is granted as terminated without any consideration from the insurance company.

Survival insurance

It is recurrent that they are also called savings insurance. If the insured person is living at the end of the contract, the beneficiaries are guaranteed the payment of the capital or contracted rent.

In this type of insurance, the tax regime is particularly important, which will depend on the legislation of each country.

In this way, it is worth highlighting the Insured Pension Projects (PPA) and the Private Systematic Savings Projects.

Insured Pension Plans (IPP)

These are life insurance policies designed to accumulate capital that is felt at the time of the occurrence of the contingency established in the contract.

The covered contingencies will be retirement, death, persistent work incapacity and dependence. However, the primary coverage is retirement.

Its legal and fiscal regime is similar to that of private pension projects.
Similarly, its performance and properties are also similar to those of the pension projects.

The difference between the two products is that the PPP gives a guaranteed interest rate.

So there is no chance of losing the invested capital. These are products designed for people who are more conservative or close to retirement age, who do not want to take risks.

Private Systematic Savings Plans (PSSP)

These are private long-term savings insurance policies. Their purpose is to pay premiums to constitute an annuity, which can be received from an age indicated in the contract.

However, the income is not related to the theoretical ones of retirement, incapacity for work, death and enormous dependence, as is the case with retirement projects and PPPs.

It is possible to receive the income without waiting for retirement, although a minimum period must have elapsed since the first contribution.

Mixed insurance

The insurance company guarantees the payment of a capital sum to the beneficiaries upon the death of the insured.

If this does not happen, it is paid out on the expiry of the insurance if the insured is still alive on that date.

Think about buying life insurance

Life insurance is nothing more than the options people have to seek to guarantee their future as well as that of their family members in the event of their death.

That’s why you must learned about the types of life insurance offered by insurance companies. You can take another look and see the benefits and limitations of each.

The important thing is that you can make a good choice and take advantage of each plan.

Life insurance is an excellent investment for the medium and long term.

Find your trusted insurance agent and tell them your points so they can give you good advice. Make a decision and take control.