There are many doubts about life insurance policies. However, this type of policy is very interesting and has certain advantages that should be taken into account when deciding whether to take it out or not.
In any case, the best option when it comes to contracting one of these policies is to count on the services of a good comparator to be able to compare your life insurance and find the one that best suits your needs and your budget.
What is life insurance?
Life insurance is a type of insurance that, in the event of death or disability of the insured, guarantees the payment of an indemnity to the insured, guarantees the payment of an indemnity to the insured in the event of disability. Thus, if the insured dies or becomes unable to work, the insurance company will pay an indemnity to the beneficiaries of the policy – who are usually the insured’s spouse or children – or to the insured, in exchange for the payment of a premium. in exchange for the payment of a premium.
Advantages and disadvantages of having a life insurance policy
Advantages of life insurance
Life insurance has a number of advantages. They are the following:
- Protection of our loved ones in case of death or disability.
- Tax benefits. You can deduct life insurance that is linked to a mortgage prior to 2013 and as long as the capital paid on the mortgage does not exceed 9040 € per year, as this is the maximum that can be deducted.
- You can leave money to your heirs, even if you have no savings.
- You can leave the life insurance money to the person you want, they do not have to be your heirs.
- You can have more than one life insurance, one for your children, another one for your partner, another one to cover the mortgage, etc.
- Life insurances are the cheapest compared to home or car insurances, since their premium is lower.
- Not only do they protect your family members, but they also protect you in case of absolute or permanent disability. You can also take out professional disability or serious illness guarantees in which you receive money in the event of a heart attack or cancer.
- The average cost of a life insurance is around 150 € per year outside the bank, if the life insurance is done in the bank the price can be up to 80% higher.
Disadvantages of life insurance
Life insurance also has some disadvantages. These are the following:
- Life insurance does not have coverage for the entire life of the insured, moreover, there are some ages of exit from the insurance where it ends, which are usually between 65 and 70 years depending on the company.
- The price of the insurance increases as the insured gets older. Thus, an initially cheap policy can become an expensive policy.
- Depending on the life insurance, the coverage may be temporary.
The average price of life insurance
The price of life insurance will depend on several factors:
- Age: the age of the insured is fundamental. Thus, the older the insured, the more expensive the insurance premium will be.
- Insured capital: the price of the insurance will also increase the higher the amount of the insured capital. In this sense, the sum insured is the amount of the indemnity that the insurer will pay to the beneficiaries of the life insurance policy.
- Other factors: additional coverages or certain circumstances, such as engaging in a dangerous profession or practicing a risky sport, will also increase the insurance premium.
Although the price of life insurance depends on many factors, its average price is 300 € per year if it is contracted with a bank and about 150 € per year if it is contracted with an insurance company.
Undoubtedly, life insurance is a product that can be interesting, although it is important to have a good insurance comparator that offers us the policies that best suit us and our family.