Do you know what life insurance is? Sure you have wondered about these plans, but you may not know exactly what, what it covers and what it does not cover. In insuremexico we will detail some important points
What is a insurance of life?
A life insurance is a policy (contract) that seeks to financially protect the beneficiaries of the insured in the event that he or she dies naturally or accidentally. It also covers disability under certain conditions, this in order to create financial support that allows the beneficiaries to meet the expenses in the event that any of these events occurs. Some other more comprehensive ones can cover serious illnesses, accidents and offer funeral services plan, etc.
Life insurance is based on an insured capital, which is guaranteed by installments that you pay and which are known as: Premiums; which make up the patrimony that ensures the client. In the event of death or becoming incapacitated (if applicable) according to the coverage of the policy, the life insurance will be effective and the beneficiaries will be compensated as established in the contract.
Taking out life insurance, especially if you are the family provider, is important because:
- Protect your family and beneficiaries financially in case you are absent.
- It is a guarantee of tranquility in a difficult moment that can destabilize the family.
- With the capital of a life insurance, the beneficiaries will be able to cover the debts of the insured to avoid losses or deficiencies.
- It guarantees the academic future of the children, their clothing, food, etc.
- Represents financial support for the couple in a difficult time.
Types of life insurance
In Mexico, 3 main types of life insurance plans are handled:
- Temporary insurance: It is one that guarantees the capital contracted to the beneficiaries in the event of the death of the insured only for a period of time and can be renewed. If the insured survives the time of the contract and does not renew it, the insurer is not responsible for paying the contracted capital.
- Ordinary insurance: These are those that extend their coverage throughout the life of the insured indefinitely, so they must pay premiums until their death.
- Endowment insurance: It is a life insurance that guarantees the capital contracted “in life” for the beneficiaries, that is, the insured must survive the duration of the policy. It is known as savings life insurance.
What does Life Insurance not cover?
Life insurance has a fairly extensive list of situations in which the death of the insured is not covered. As we mentioned before, death is covered if it occurs naturally or due to an accident, or in case of illness if it is included in the policy, so situations such as, for example:
- Suicide or any type of self-injury that causes the death, disability or illness of the insured.
- Death or disability of the insured under the influence of alcohol, drugs or any substance that affects their mental and motor functions.
- Death due to negligence or recklessness.
- Death penalty.
- If the insured dies while committing a crime or being an accomplice of one.
- If the insured dies performing a high-risk activity or sport (unless his policy is special).
- Death by nuclear fission or fusion, terrorism, war or any type of military, civil or any other kind of conflict.
- Illnesses prior to the life insurance contract.
(In some cases after 2 years the policy is indisputable
Life insurance is a guarantee of peace of mind for your family in case you are absent. Although it is not pleasant to think that this could happen, the truth is that being cautious can save your family members great anguish and financial difficulties at such a difficult time.
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