Prevention and security play an important role for Germans: term life insurance is one of the types of insurance that is neglected. A mere 16 percent have such coverage. Karina Hauser, pensions expert at Cosmos Direkt explains the most important guarantees and options of term life insurance.
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REINSURANCE GUARANTEE
In the case of important life events – for example the birth of a child, marriage or the purchase of a home – the sum insured can be easily and flexibly increased and adapted to new requirements with a supplementary insurance guarantee without a new health check.
EXTENSION OPTION
Not everything in life can always be planned down to the last detail. The extension option therefore offers the possibility of reacting flexibly to new phases in life, for example if the children’s education takes longer than expected or loan obligations cannot be repaid as planned. The term of the contract can be extended by several years without a new health check.
THE PREFERRED DEATH BENEFIT
Under certain conditions, some insurers offer the option of paying out the sum insured while you are still alive. If the insured person suffers from an incurable disease with a fatal diagnosis, they can still dispose of the benefits themselves and use them for their own benefit.
DYNAMIC OPTION
A dynamic option gives you the opportunity to let the insurance cover grow with increasing needs or to maintain purchasing power. The contribution can be increased annually by an agreed percentage – without a new health check.
ADDITIONAL ACCIDENT INSURANCE
As part of additional accident insurance, some insurers offer that the agreed sum insured is paid out in the event of incapacity for work as a result of an accident. If the insured person dies as a result of an accident, double the sum insured will be paid out.
CHILDREN BONUS
When a child is born or adopted, the originally agreed sum insured is temporarily increased by a fixed percentage. This leaves enough time to permanently adapt the insurance cover to the new life situation via the supplementary insurance guarantee.
IMMEDIATE CONSTRUCTION BONUS
When building or buying a property, the originally agreed sum insured also increases for a specified period. This leaves enough time here too to permanently adjust the amount insured to the new situation via the supplementary insurance guarantee. Depending on the insurer, the immediate construction bonus is either a fixed amount or the agreed sum insured increases by a certain percentage.
POLICYHOLDER SUBSEQUENTLY CHANGEABLE
The option of being able to change the policyholder afterwards may save inheritance tax in the event of a claim. For example, as part of the mutual insurance of life partners “crosswise”.
Hauser’s conclusion: “Term life insurance coverage can be designed flexibly and individually – depending on the provider and its additional contract options and guarantees. In this way, the insurance cover can be adapted to changed life situations even after the contract has been signed. “
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