Death insurance: advantages and disadvantages

What is death insurance?

Death insurance is presented as a solution or a provident product. It guarantees income to the entourage of the subscriber after his death (the sum of money is paid to the beneficiary in the form of an annuity or in one go).

There are 2 types of death insurance contracts:

  • whole life insurance: the subscriber is covered, regardless of the date of his death;
  • temporary death insurance: this insurance also guarantees the payment of income to the beneficiary, provided that the insured dies during the validity of the contract. If he is still alive at the end of the contract, the latter will be purely and simply cancelled.

Because of the diversity and complexity of contracts, it is not easy to choose the one that suits you best. To avoid unpleasant surprises, compare death insurance.

The advantages and disadvantages of life insurance


Advantages

Life insurance offers several considerable advantages, both to the subscriber and to the beneficiary. A few have been listed below:

  • it offers support to family members in the event of death, whether premature or not;
  • it can be used in the event of incapacity or invalidity for work, loss of employment, etc.
  • it offers the possibility of paying the capital in the form of annuities for the schooling of the children;
  • the amount of the capital is defined at the time of signing the contract;
  • Contrary to what one might think, the beneficiary is not necessarily a member of the family.

If you would like more information, do not hesitate to consult the insurance comparator.

Disadvantages

Despite its many advantages, life insurance also has disadvantages:

  • it is limited in time: the contract ends once the age limit is reached (most often 65 or 70 years old), and this, even if the subscriber is still alive (we speak of capital with lost funds in this case );
  • unlike savings, it does not generate interest;
  • the insured cannot recover either his contributions or his initial capital;
  • from a certain age, the insured must carry out health examinations before taking out a contract;
  • the amount of the contributions is calculated according to the profile of the insured (it increases with the age of the latter).

Death insurance is one of the solutions par excellence for preventing the financial situation that loved ones will be in after your death. But the choice of an organization is not easy and the terms of the contracts complex, take your time before subscribing to such insurance.