When looking for insurance, the differences between certain policies may not be obvious to the insured. For example, you have to make a distinction between life and death insurance. Although these two types of insurance are similar, the terms of the contracts are not quite the same, and the principles are also very different.
Life and death insurance: definitions
Death insurance is a purely insurance product: in these insurance contracts, you pay a departure premium which will condition a capital to be paid to the beneficiary of your choice when you die, to provide financial assistance. But in no case will you be able to benefit from this capital.
Life insurance, in the financial sense of the term, is assimilated to a classic investment product (booklet type, savings plan, etc.) but which benefits from a beneficiary clause allowing you to choose your “heir” in the event of death. In this case, you can pass on capital like working your money, and buy back your capital partially or totally during your lifetime.
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Note that death insurance is special life insurance, and what is commonly referred to here as life insurance is an abuse of language to identify a financial life insurance.
Life and death insurance: different objectives
It must be understood that the two insurances are different. Death insurance is a foresight tool while life insurance is a financial investment and there is a death clause. Life insurance then becomes a savings product. The beneficiary clause of this contract can be used to shelter your loved ones, but it is in no way a real tool for provident death. It is more of an investment product on which to deposit your capital to make it grow.
The purpose of death insurance is to provide capital or an annuity to your heirs in the event of death, and to help them provide for their needs after this heavy ordeal.
The purpose of life insurance is you build up savings, and incidentally to allow identified relatives to directly recover this savings if you were to disappear.
These two products are really different, and it is obvious that all this can seem very abstract for a novice, but you can get help from an insurance expert. A wealth manager, for example, will be able to provide you with the information necessary and useful for life insurance.
If you want to level the ground, especially on savings type insurance, and be able to view all the offers available, use an insurance comparator. This will allow you to spot the best contracts for your situation, at the most attractive rates, and you will then only have to request the validation of a general insurance agent or a wealth advisor at the time of subscription.