Among the insurances you should consider, or even have to take out, the Life insurance is one of the most important to have What would happen if you died and had a house to pay for? Faced with a disability situation, how would you ensure your income? Ensuring yourself and your loved ones in case of unforeseen events is essential. However, it is important be properly clarified about what you are contracting and do so in order to obtain the best protection, at the lowest price. In this article, we discuss some notions inherent to life insurance, as well as a set of errors that must be avoided when contracting.
What is life insurance?
Life insurance is a contract concluded between the insured and the insurer, where the latter undertakes to pay the contracted capital, in case of death of the insured (insurance in case of death) or in case of survival (insurance in case of life). With regard to the latter situation, we refer, for example, to cases of disability that prevent the normal performance of a work activity. So, in these situations, the insured has financial support despite not being able to earn income on its own. When contracting a life insurance policy, you can also benefit from financial support in hospitalization situations.
Not comparing options between insurers
Before taking out life insurance, it is important compare prices. The same happens if you go shopping or when you subscribe to a television service, for example. So you should start by making a detailed research on the various options coverage and associated pricing across multiple insurers. Only then will you be well informed before making a conscious decision. If, on the other hand, you already have life insurance and you think you are paying too much, there is always time for a change. Ask for simulations and compare prices. If you find better, change. Also read: Health Insurance: 7 mistakes to avoid when contracting
Get life insurance through the bank
This situation may or may not be an error. You will only know after making a comparison. Normally, when you take out life insurance with a home loan, you have the option to do it at the bank where are you asking for credit? However, this situation may or may not be compensatory. Banks often attribute benefits to those who take out life insurance together with credit, such as a reduction in the spread. Even so, it must check if this benefit pays off compared to the amount you will pay. It may pay off to have out-of-the-bank insurance and a slightly higher spread. Also read: Do you have life insurance? 7 situations where you can make a difference
Not considering the possibility of disability
Many people associate life insurance only with death situations, that is, they think that they only serve to support the family in the event of the insured person’s death. However, this is not the truth. Death cases are undoubtedly one of the coverages of life insurance, however, these they also cover situations where the insured is alive. What would happen if the insured became disabled? How would it be possible to maintain his and his family’s financial situation, since he would not be able to work? In order to safeguard this situation, you must opt for life insurance that has coverage for disability situations, preferably total and permanent disability. Despite being more expensive, this option is more comprehensive than coverage in a situation of absolute and permanent disability. Total and permanent disability coverage guarantees the payment of compensation if the insured suffers a disability equal to or greater than 60% or 65% that prevents him from exercising his usual profession or other remunerated activity compatible with his abilities. Also read: Insurance guide: What you need to know to protect yourself
Not clarifying all aspects of coverage
When subscribing to life insurance, it is extremely important to ensure that is aware of all aspects of coverage. You must inform yourself about all insurance coverage, the respective premium and the guaranteed capital for the different coverages. If you have dependent family members, you must calculate their annual expenses, so that the insured capital covers these expenses until they start working. Therefore, you should read the conditions of the contract and, whenever there is a fee or any other less clear issue that could increase the value of the insurance premium, research what it is about. Also check the exclusions to make sure there aren’t any that could affect you. Normally, life insurance does not cover extreme sports, some specific illnesses, as well as low levels of disability. Also read: Life insurance: What affects the premium payable?
Not checking the credibility of the insurer
Another very important aspect to take into account whenever you take out a life insurance policy is the insurer’s credibility. Today there are many insurance companies, some better known than others. However, not all have the same credibility and financial stability. Remember that Cheapest is not always best, and the same rule applies to life insurance. Also read: Life insurance: How it works and in what situations you have (or should) do it
Waiting too long to invest in life insurance
This topic is perhaps one of the most important and concerns the right time to take out a life insurance policy. In truth, there is no set ideal age. However, you must do it while you are young. Life insurance is a way of guaranteeing financial support for you and your loved ones. in the event that something happens. Although we are careful to prevent something serious from happening, the truth is that we do not control the future. Remember that there are situations in which must have life insurance, such as when you take out a home loan. However, in other situations, it is up to the person to decide whether or not to do so. Also read: Car without insurance? Do you know what can happen to you?