Life insurance in the event of death: what it is and types

Life insurance in the event of death: a way to take care of loved ones even in the most unfortunate eventuality. Let’s find out what it is, the types and what is considered to determine the premium of the life and death policy.

The ‘ individual life insurance guarantees a capital relative of an insured person who had to lose his life. It can be activated with contracts that last throughout the life of the contractor or for limited periods. The premium may also vary according to different aspects.

Life insurance in the event of death: what it is

Talking about death, especially in a superstitious country like ours, is always difficult. We are very free to do the conjurations (indeed, let’s do them!) But the reality of things is that we are all subjected to the unpredictability of life. Often we do not consider how much chance plays a decisive role in our lives and unfortunately, fate can also take lives (and you still go to conjure!).

But what would happen to a family if the person who maintains it is missing? The purpose of the life insurance blog policies is to remedy as much as possible the economic damage that follows the death of a relative, especially if the latter represented a source of income for the family unit. Subscribing to ‘ individual life insurance is a way to take care of our loved ones even if tomorrow we had not (and here avalanche of spells!). But let’s immediately see the definition of ” death insurance policy ” from the Ania glossary:

A life insurance contract that provides for the payment of a lump sum to the beneficiary in the event of the death of the policyholder. The policy in the event of death can be temporary if the contract provides that payment will be made if the death of the insured occurs during the term of the contract.

Put simply, upon the death of the insured, the persons named in the contract will receive a lump sum. However, there are various aspects to consider – and now let’s see everything – but the first distinction is between life insurance and temporary death insurance.

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Life insurance policy in the event of death

The mechanism of this type of life insurance in the event of death is simple: when the insured person dies, the beneficiaries indicated in the contract will receive the insured capital. The insurance company will liquidate the sum insured against the payment of a premium, which can take place in different ways:

  • single premium payment: the premium is paid to the insurance company in a lump sum upon signing the policy;
  • single recurring premium payment: a series of premiums are periodically paid to the insurance company and help build the final capital that will be paid out to the beneficiaries;
  • constant or revaluable premium payment: in the first case the amount to be paid remains the same until the expiry of the contract, that is the death of the insured. On the other hand, when the revaluable premium is chosen, it undergoes variations according to inflation.

The whole life death insurance policy transfers capital to the persons chosen by the insured at the time of his passing, regardless of the shares of the inheritance that are due by law to the heirs. Furthermore, this type of insurance commits the insurance company to pay the beneficiaries whatever the time of the death of the insured person.

The latter is the most significant difference with the temporary life insurance policy or TCM.

Temporary Life Insurance Policy

The temporary life insurance policy in the event of death (TCM) is risk insurance that instead implies a pre-established duration in the contract. Therefore it has value only for a certain period, beyond which no liquidation would be due to the beneficiaries or the contractor. This means that the insurance company will pay the capital to the beneficiaries only if the insured person dies within the period indicated in the contract.

The coverage period can be chosen by those who subscribe to temporary life insurance, usually ten, twenty, or thirty years. During this interval, the policyholder will pay an annual premium which can also be paid in installments in semesters, quarters, etc.

The beneficiaries will receive the insured capital established in the policy only if the insured falls short within the specified interval, as we have already seen. But if that didn’t happen and the policyholder was still alive when the policy expired, the insurance company would keep all premiums paid and the contract would simply end. The case of mixed life policies is different.

The TCM is a good choice even when they are active in funding that might embarrass the family in case of those who produce income death. It is a solution that is often chosen by those who, for example, have a mortgage. However, if you are looking for a good investment or an interesting pension supplement, take a look at Life insurance policy: what it is, types, and how it works.

Life insurance in the event of death: how is the premium calculated?

The insurance companies consider many variables before determining the premium for a life insurance policy in case of death. The factors considered concern the risk and involve, above all, these aspects:

  • amount of the insured capital ;
  • age of the contractor;
  • health condition of the policyholder;
  • conditions for splitting the premium ;
  • duration of coverage of temporary policies;
  • Does the contractor have a smoking habit?

An advanced age, poor health, and the habit of smoking contribute to raising the premium. On the contrary, the figure will be lowered if the policyholder were to be young, healthy, and non-smoker.

In any case, a life insurance policy can never restore a person to live, that’s for sure. But he will be able to make an economic contribution to his loved ones. And try to think about what it means to be aware of helping your family even after the death. It is not a trivial matter.