What is the difference between life insurance and death insurance?

One out of two French households has at least one life insurance policy. Knowing that there are around fifty million in France, this means that some households have several contracts.

Life insurance in case of hardship

Life insurance is a misnomer. It does not guarantee life at all! It’s just a tool to put money aside for your old age. The money placed on a life insurance contract is indeed not stuck inside. It can be taken back partially or totally. We then speak of partial or total redemption. Moreover, it is not necessary to wait for his “old days”. You can also dip into your life insurance contract in the event of a hard blow, unemployment or illness, for example. It can also finance the contribution of a real estate project.

I am of course not naive. It is regularly repeated in the media that the French save a lot. The reality is different. If some save because their income allows them, others, very, too many, are always in the red. They would like to one day be able to put a little money aside without succeeding.

Death insurance to insure loved ones

The alter-ego of the life insurance contract is the death insurance contract. His goal is not to save money. It is really insurance against a risk, that of the death of the person who contracts it, whatever the cause, illness or accident. This type of contract is said to be “lost funds”. That is to say that the sums paid do not make small. If you suspend the contract, you will not recover anything.

On the other hand, in the event of death, the insurance starts. It pays a capital, or an annuity to the beneficiaries registered in the contract. If we also take out the “total incapacity for work” guarantee, the insurance provides a replacement income for the subscriber.

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