Guaranteeing that the insured and their family maintain their usual standard of living no matter what happens to them is the main argument for having life insurance. But there are other equally important ones that highlight the usefulness of being foresighted.
The main function of this insurance is to protect individuals against a possible adverse situation caused by the death or absolute permanent disability of the insured.
The main function of this insurance is to protect individuals against a possible adverse situation caused by the death or absolute permanent disability of the insured.
Life takes many turns. Although today a person enjoys health and economic security to cover their needs and that of their family members, the situation can change from one day to the next. An example of this has been the covid-19 pandemic. For this reason, having life insurance is convenient to ensure the future, becoming an essential support for families and for the insured themselves. These are the advantages:
The objective of life insurance: to protect the future
It is more than likely that, at some point in their lives, people ask themselves what would become of their family or of themselves if something happened to them. With life insurance, the answer is known in advance: there would be a certain income to guarantee the quality of life. And it is that the main function of life insurance is to protect individuals against a possible adverse situation caused by the death or absolute permanent disability of the insured, providing economic stability to the family
In fact, according to data from the Spanish Union of Insurance and Reinsurance Entities (Unespa), each year a third of the deceased between the ages of 41 and 50 in Spain are protected with insurance of this type.
In other words, in the most difficult times, this type of protection can become one of the main aids for many homes, since "it offers the peace of mind of knowing that whatever happens, a family will be able to maintain the usual standard of living for a while to readapt to the new situation”, explains José Manuel Veiga, director of Protection Insurance at BanSabadell Seguros.
Among these variables it is necessary to consider, for example, that the children can continue their studies or maintain the habitual residence even if part of the mortgage loan still remains to be paid.
It becomes relevant in the most important moments of life
The basic coverage of life insurance is the death of the insured, a fatal circumstance in which having contracted a product of these characteristics acquires special relevance. Especially for those families with a high economic dependence, or even total, of the insured person.
In these situations, the beneficiaries or the insured himself would receive the amount previously set to cushion the economic impact caused by the absence or absolute permanent disability of the insured person. To, as already mentioned, face the payment of a mortgage or a loan.
In Spain, there are 3.8 million people with mortgages who have life insurance, according to the report La fatalidad, en el por muco. Life insurance benefits related to mortgages, from the Unespa initiative, We Are Safe. These people can rest easy knowing that they and their family members will have no problem paying off this debt, no matter what.
It pays to take out life insurance
Many people wonder if it is really necessary to assume another expense in addition to those that are already habitually incurred and take out life insurance, since it is voluntary. However, experts emphasize that it is a type of insurance that is especially relevant in the most transcendental moments and with the essential utility of shielding the economic needs of the family and oneself if something happens.
"We must bear in mind that, on average, it takes about five years for a family to recover financially after the loss of one of its members, and in this type of possible situation we must all think about protecting our loved ones," he points out. Veiga.
Official figures state that, each year, nearly 70,000 Spanish families are beneficiaries of this type of policy, with an average benefit of 45,000 euros. This amount makes it possible to settle around 4,700 mortgages annually, according to the aforementioned report by Estamos Seguros, and exceeding 166 million euros in total.
Another series of coverages
Life insurance not only covers in the event of death, it is also very useful to improve the economic well-being of the insured themselves and their family. The reason is that it protects them against equally unforeseen events, including total permanent disability.
“The main coverage of any life insurance is death, but it is just as important to have absolute permanent disability coverage. In this situation, the insured will not be able to do any paid work and may also imply certain expenses such as medical expenses or have an amount that compensates for the decrease in income due to having to stop working for a while”, explains the BanSabadell Seguros expert. .
But there are more cases in which life insurance demonstrates its importance, since there is also another very interesting series of complementary coverages according to the specific needs of each person. This type of insurance offers the possibility of requesting a capital advance if you suffer from a serious illness, such as breast cancer. Money that helps the insured to pay for medical treatments that they might not otherwise be able to afford.
Tax rebates
To encourage the contracting of life insurance in Spain “tax deduction should be promoted. In addition, death and disability benefits should be more subsidized at the tax level for inheritance tax and personal income tax (IRPF), respectively", claims the expert from BanSabadell Seguros, since it is currently not possible benefit from a reduction in the personal income tax base for the payment of premiums.
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