A person’s financial life goes through ups and downs, including unexpected events such as illness and accidents. In this sense, anticipating these events is important and very important in planning for the future economy.
Taking out life insurance is a great way to protect yourself against these situations, as it provides peace of mind and the assurance that there will be money available even in times of crisis. For this reason, we will present today’s article on what is life insurance the benefits of life insurance and. Don’t miss it!
What is life insurance?
It is a financial stability protection instrument, issued by an authorized management company, in this case a life insurance company.
In Chile, life insurance companies are regulated by the Financial Market Commission (CMF). But why buy life insurance? Life insurance is designed to meet the following objectives in the event of death or disability of the insured:
– Paying money to the insured against the risk of accidents and / or health.
– Protecting loved ones and family assets.
– Payment of debt if the policyholder has a financial debt.
– Pay your friends or creditors who are insured (if you are doing business with them, for example).
– Guarantee income to the insured or beneficiaries.
What types of life insurance are available?
According to the Association of Chilean Insurers (AACH), there are the following types:
1. Lifetime. Its growth continues until the death of the insured, i.e., it ensures the payment of a large amount after the death of the insured, regardless of the date of death, whether due to illness or accident. The beneficiary or beneficiaries listed in the policy will receive the payment as soon as the death is confirmed.
2. Long Life. Like Whole Life, capital is paid to the beneficiary immediately after accidental death, fatal accident or accidental disability. However, the event must occur at a specified time (before the end of the agreed period of insurance). If the insured is alive at the end of the fixed term, the insurance is cancelled.
3. Family Protection. It protects all members of the family, be it death or other perils such as disability or loss of insurance if covered by the policy. Like Temporary Life, its duration is for a known period of time.
4. Disability or Invalidity. It covers the incapacity of the insured because his physical or mental capacity is weakened, due to illness or accident. The payment of compensation is similar to the payment of a lump sum or annuity, according to the provisions of the policy. Its duration is for a specified period of time.
5. Support. It covers services, benefits or benefits paid upon the death of the insured. Its duration is for a specified period of time.
3 Benefits of getting Life Insurance
Following are the major benefits offered by Life Insurance Companies:
1. Financial protection of the family in case of accident or death.
The death of the head of the family is a problem that needs to be considered now. Even if both parents are working, the loss of income, even from one of the parents, can make it very difficult to maintain a normal life.
That’s why life insurance provides financial security and allows you to meet the needs of your family, even if they no longer rely on you.
2. Debt repayment
If there are debts at the time of death, the proceeds of the beneficiary can be used to pay off any outstanding debts.
This can save your loved ones from having to face the problem, which can shut them down if they don’t have the essentials.
3. Contributions on retirement or disability
Depending on the insurance company, there are additional policies or coverages that protect you against events such as permanent or partial disability.
On the other hand, there are some insurance policies that include funds that can be used to help with your retirement.
In any case, you can take advantage of the great cover to protect the financial stability of your loved ones in the event that they need to have a plan B.
4. Payment of funeral expenses for the funeral of the insured person
Funeral expenses are often very high and this can be very difficult for families to cope with when an income earner dies. One possibility to solve this problem is to use a part of the insurance money to achieve these goals.
As you can see, taking life insurance in Chile is very important, because it provides protection for those you love the most. In the market you will find several options that suit your needs and budget.