The life insurances they have a very simple operation. The insured pays in exchange for the fact that, if something happens to him and he dies, the company compensates his beneficiaries with a previously agreed amount (80,000 euros, 150,000 euros …). They can also be made so that the money is received by the insured himself, in case he has to request a disability.
Thus, these policies are always made as preventive measure. According to data from Statistics National Institute (INE), there is little chance of dying when you are young. For example, the probability of dying at the age of 20 is less than 0.21 in 1000. And the probability of dying at 45 is only 1 in 1000. These policies, although unlikely to have to intervene, provide peace of mind.
In 2018, according to data from Unespa, the insurance employer, in Spain there were about 20 million people with risk life insurance, that is, they will receive compensation if they die. A third of the Spaniards between 41 and 50 who die each year are protected with these policies.
This type of insurance is used more when there is a mortgage, so that the family can pay off the loan if any misfortune occurs. In fact, every year about 8,400 families suffer a death or illness that makes it difficult for them to pay their mortgage; of them, about 4,800 have the protection of a policy to pay off that debt.
The cost-benefit of life insurance
However, there are those who think that it is not worth paying for years for a service that they may never need. Also, after paying so long, it is possible that more than what is received as compensation may have been given. According to the experts of elmejorsegurodevida.com, the leading online life insurance comparator, the possibility of paying more than what you receive is very small.
According to 2019 Unespa data, only 3.9% of the insured died after paying more than 30 years. Conversely, 3 out of 10 people with life insurance died less than 5 years after purchasing it.
Since elmejorsegurodevida.com They put some examples to calculate the cost-benefit of these products. Keep in mind that the prices of these policies vary according to the insured capital and age, so they go up a little each year that passes.
A 30-year-old woman hires 100,000 euros for 46 euros a year. He pays it for 5 years and then he dies, when the fee was 57 euros a year. In total, you will have paid less than 300 euros and, in return, your beneficiaries will receive 100,000 euros.
A 50-year-old man insures 250,000 euros for 620 euros a year. He pays it for 8 years and then he dies, when the fee was 1,180 euros. In that time, he will have paid about 7,500 euros, but his family will receive 250,000.
How to know how much capital to insure
Even if life insurance pays for several years without having to use it, chances are it pays to have it. However, what is really important is that the money that the beneficiaries receive is sufficient to face the debts and expenses left by the deceased. Therefore, it is essential to know what capital to hire.
Broadly speaking, life insurance should cover, at least, 5 years of full salary. That is the estimated number that a family needs to recover financially from the death or illness of a member. For example, if a person charges 25,000 euros per year, he should at least insure 125,000 euros. To that amount you have to add the outstanding debts or loans to have a more realistic figure.
“A more accurate way of doing the calculation is to decide how much money we want to leave our family and for how long. For example, if we want them to have 1000 euros a month for 5 years, we will need to insure 60,000 euros (1000 euros x 12 months x 5 years). And to that figure we must add the mortgage and the pending loans “, they explain from elmejorsegurodevida.com.
The figures reflect that it is worth paying to have life insurance. The possibility of dying before your time is very small, but very real. Therefore, the experts of elmejorsegurodevida.com They recommend comparing prices so as not to overpay for these products. In this way, the cost-benefit can be made even better for the user.
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