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The person who purchases life insurance pays periodic premiums to the insurance company in exchange for a sum of money (called the death benefit).
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These types of policies are financial protection for the future. They allow the relatives of the person who has died to get ahead and maintain their standard of living
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Is life insurance necessary to be granted a mortgage?
There are still many people who think that take out life insurance It is not for them, simply because rationalizing that life can give us an unexpected setback overnight sounds too far away. It is still an argument constructed with pure magical thinking. “I’m in good health, so I don’t need it.” “It’s not going to happen to me.” “I don’t want to be paying the insurance company for doing nothing.”
According to UNESPA data, in Spain there are almost four million mortgage holders who have taken out one of these insurance policies to cover your back and know that your loved ones will not have problems when, unfortunately or by accident, a death occurs.
The figures show that, despite everything, a non-negligible percentage of the population values financial peace of mind of this type of policy and prepares for the worst with some advance notice.
Protect your family
Almost everyone asks this question at some point in their life. “What will happen to mine if I’m not here? How will they be able to sustain themselves?” To begin with, protect the assets and well-being of one’s family with a policy that covers the worst of setbacks (our death) not only provides financial securitybut it can have a positive impact on various aspects of our family life.
When we take out life insurance, we choose the beneficiary or beneficiaries who will receive the so-called “death benefit”, basically, certain amount of money stipulated during the policy coverage period.
This money is key. It will be used to cover different games and avoid the decapitalization of those we love most: mortgage, loans, daily expenses, children’s education, care of dependents and funeral expenses. In some cases, an active policy will be a lifeline at an extremely difficult time, if the deceased person’s family is dependent on a single source of income.
The debt problem
Another of the most complicated situations derived from a death is the debt management, whether mortgages or different types of loans that still have time to mature. It matters little that the debtor is no longer there. We must continue to cover the commitment made within the stipulated deadlines if we do not want the interests to increase exponentially and the problem to become unmanageable. They are probably the relatives of the person who has died who inherit the debt and they have to obtain resources to return it.
He death benefit of life insurance can be used to settle these outstanding debtspreventing family members from being forced to assume the newly acquired financial responsibility.
The other reasons to take out life insurance
We talk about solving the lives of those we love most, or, at least, relieve it on the purely material side. And what if they are the ones who have to take care of us?
In many cases, this same insurance would also serve to protect us in other types of dramatic situations. Some policies offer additional benefits. In case we are diagnosed with a serious illness o we suffer from a disabilitywe can receive an advance payment of the death benefit for cover medical expensesmaintain our quality of life and adapt it to the new situation.
“It must be taken into account 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 situations we must all think about protecting our loved ones,” explains Manuel Veiga, director of Protection Insurance at Banco Sabadell, in an article in El País.
Logic dictates this point. The loss of a loved one is already an emotionally terrible experience. But additional financial stress can further aggravate the situation. Have taken out life insurance reduces this stress by providing the family with a financial safety net allowing them to focus on their grief and recovery, rather than worrying about how to pay bills and cover everyday expenses.
Themes
2024-03-07 07:02:02
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