Subscription to insurance allows the insured or his family to benefit from a guarantee when contingencies arise. It helps to secure the implementation of projects. There is a distinction between provident or death insurance and life insurance. Both are assurances relating to two very different realities. How important is death insurance?
Definition of concepts
Life insurance is a contract that allows the insured to grow their savings through investments. It helps finance projects such as studies, retirement, the acquisition of real estate …
Death insurance is a contract that consists of protecting loved ones by contributing to prevent a risk (death, illness, disability, etc.).
What are their goals ?
The life insurance contract aims to build up capital in order to materialize a project or pass it on to a loved one. It aims above all at the survival of the insured.
Death insurance, on the other hand, is primarily aimed at protecting loved ones. It allows them to meet their daily needs despite the occurrence of an event that could reduce earning capacity.
Death and life insurance
What differences? The two insurances are different on several points. In the first case, the beneficiary of the contribution can be the insured or his relatives. Contributed funds are accessible to the subscriber at any time. Contributions make it possible to build up capital. The accumulation of the latter is tax-exempt provided the withdrawal is made eight (08) years later. In addition, the amount must not exceed 4,600 or 9,200 euros per year, depending on the case. Many guarantees are offered in this context (death floor, increased death, indexed death and ratchet death). The subscription is long term.
In the second case, the beneficiary is mainly made up of relatives (family, etc.) of the insured. Contributions are irrecoverable as long as the risk does not arise. The death benefit is not subject to inheritance tax if the beneficiary is a spouse, brother or sister living under the same roof as the insured. Only designated beneficiaries will be able to benefit from the funds contributed after the death of the insured. The capital contribution is withdrawn in full when the risk occurs within the period provided for by the contract, whatever its duration. A distinction is made, according to the risks, between the “incapacity” guarantee, the “invalidity” guarantee and the “death” guarantee. The subscriber contributes either for his entire life or for a fixed period.
Life and life insurance: convergences
The two types of insurance come together for the duration of the contract which can be temporary or permanent, the value of contributions (capital) or the management of beneficiaries which vary according to the terms of the contract.
When do you subscribe to one or the other?
Subscription to life insurance is done when you want to carry out a project, finance your children's education for example.
Death insurance is recommended when you want to contribute to protect your loved ones in the event of disability, incapacity or death.
Importance of death insurance
Death insurance is always advantageous even in the event of premature death or in the event of short-term contributions. It allows you to guarantee the protection of your family after your death thanks to moderate subscriptions.
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