What Life Insurance is the best?
An ideal life policy is one that fits the real needs of the family. Since a coverage of this type is designed to protect the future of the dependents in the absence of the head of the family, for this reason it is necessary to consider a current panorama of the financial situation faced or could be faced by household members.
Life insurance can be of different types, so to consider the priorities of the family is of the utmost importance. For this reason, it is convenient to know the life policies offered in Mexico and recognize which one could best support the family.
Temporary insurance This coverage covers only death and is contracted for a specific time that can be from one to 20 years and up to 60 or 65 years of age. Longevity is a determining factor in the price, since the younger the insured, the lower the premium.
Ordinary Whole Life Insurance. It is also a protection in case of death of the insured; however, in case of not dying during the time specified in the policy, the insured amount can be received. It should be noted that the cost of this coverage is higher, but you have options to generate dividends from the investment, be self-financing or be able to withdraw a part of the sum insured, even if there is no loss.
Whole Life Insurance Limited Payments. In this modality, the premiums will be paid up to a certain term that can be 65 years or two decades. And the sum insured can be charged in case of death or survival in the age limit, which can be 95 or 99 years. The total price is high, because the term to cover the premium is limited and the duration of the coverage is prolonged.
Single Premium Life Insurance. In this type of policy, the premium is settled in a single exhibition and the coverage lasts for life.
Dotal insurance. This policy also works as a kind of savings insurance, since it is contracted for a time of 5, 10 or 20 years, the same period in which a premium is being paid and if at the end of this period the insured does not die, he can charge the total insured sum.
What to consider before hiring a life policy?
The financial and emotional imbalance that can affect the descendants of the head of the family, in the face of an adversity such as death, is a matter that must be dealt with in a serious manner. So to consider the need to seek adequate protection to ensure the future of the family, should be a priority that has to consider several aspects.
First, life expectancy in recent decades has increased, due to the medical advances that provide a better quality of health. In Mexico, during the decade of the thirties, the average longevity was 35 years, however, for 2014 the hope has grown almost 40 years.
But we must not lose sight of the fact that a mortal mishap is not predictable, so having a life protection is essential to provide financial security to our loved ones.
Unlike damage policies that cover the loss of a good and compensation can help replace that lost object, life insurance is protecting a person whose life can not be valued economically. Therefore, it should be considered that the compensation will not replace the loss of the loved one, but that the insured amount will help to face the economic difficulties that arise from the event. That’s why it’s important to ask:
How many people depend on the insured and how old are they?
Are they minors and still studying? What is the educational expense?
What are the monthly expenses of the home?
What is the family income each month?
These issues should present an overview of the expenses and actual income of the family and with this a financial plan can be proposed that guarantees the same level of household life, without having to face difficulties in the absence of the head or head of family. But it is also advisable to consider the actual capacity of the insured to pay, since life insurance is a protection intended to help the family economy and not to deteriorate it.
Commonly known as the price or cost of insurance, it is an amount that must be taken into account regarding the monetary capacity of the policyholder, as well as the benefits offered by each coverage. Since the most expensive policy is not always the best, other aspects such as guarantees, type of coverage and conditions of the insurance company should be considered.
The premium depends on the sum insured, age, gender, health status, activity or profession to which the insured is dedicated, as well as other hobbies or sports and additional coverages that are contracted.
Depending on the life plan that has been contracted, it will be the extent of the protection as well as additional contracted guarantees such as total disability, organic losses, funeral expenses, terminal illnesses, and so on.
These can be the children, spouse, parents of the insured or who is designated in the contract of the policy. If more than one beneficiary is chosen, the policyholder should be careful to specify precisely his full name as well as the percentage or amount of the insured sum that corresponds to him. It is advisable not to choose a minor as the heir of a life policy, or a person who acts only as collector of the same, as their obligation will be only moral and may not deliver the amount that corresponds to the true beneficiary.
Can you save with life insurance?
As mentioned, within the life products there is a coverage called dotal. This is a policy that combines the protection in case of death with the survival, that is to say that if at the end of the term of the insurance, the policyholder did not suffer any mishap, then the sum insured may be charged by it in its entirety. It should be noted that the conditions to be able to collect the survival benefit, this must be specified in the contract of the policy, it is also convenient to ask directly in the insurer about the terms and exclusions of the same.
Compare and choose the best life insurance
The National Commission for the Defense and Protection of Users of Financial Services recommends that before hiring a life policy it is important to inform oneself and compare the options of the market, as well as the different insurance companies that sell them. There are governmental tools that have the same insurers’ data as claims, sanctions, qualifications, as well as the quality of their services.