What capital to insure when hiring a Life policy?

What is the insured capital? What amount of capital should I insure? Let™s explain. Life insurance is a type of policy that, despite not being mandatory like others (car insurance for example), helps to protect all members of the family nucleus, and therefore more and more people are opting for it. hiring. Today we bring you a guide in which you will find everything related to insurable capital in the case of wanting to take out a life policy.

What is the insured capital?

The insured capital is the compensation that the beneficiary of the insurance will receive in the event that the conditions stipulated in the contract are met, normally the death of the insured or the total or absolute permanent disability of the same. Many insurers recommend that you establish a capital of about four or five times higher than our annual net salary, however, if you are not sure about what to do in this case, the ideal is to inform yourself well and ask experts on the subject.

In addition, the normal thing is that, when subscribing a policy, companies carry out a questionnaire about the health status of the future client, age and other data that, in addition to the capital, greatly influence the price of the premium.

What amount of capital do I insure?

The capital that we must insure will depend on many factors. The situation we are in, our economic capacity or what we believe is sufficient to cover our needs will mark the figure that we must establish in the contract. Of course, it must be taken into account that the higher that amount, the higher the compensation received by the insurance beneficiaries, but the premium will also be higher.

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The main thing is to know what needs we are looking to cover. For example, if we have a mortgage and we want that, in the event that we die or suffer a permanent disability, our loved ones do not have to face this loan, we must subscribe an amount that is equivalent to the mortgage. In addition, it is recommended that in these cases the capital is greater so that the family can readjust the income after the death of the member who was the main source of income. In the event that our objective is not to cover loans, we must assess what amount is the one that best suits what we are looking for.

The higher that amount, the higher the compensation received by the insurance beneficiaries, but the premium will also be more expensive.

Family structure is another of those factors that seem fundamental when establishing the capital to be insured, since it is not the same to have children as not to have them (the number of family members to protect is very important), just as It is not the same to have young children as children who are in college. In the latter case, we will have to try to assure our descendants the payment of their studies so that they can finish them despite the insured's death.

Why is it so important to buy life insurance?

As we have already explained, life insurance is highly recommended when you have a mortgaged house, if your children are studying at university or if you simply want to protect your family. There are two types of life policies:

Life Risk

It is an insurance that, mainly, protects the beneficiary against the death of the insured. Of course, if the contract expires and the client is still alive, the company should not grant any type of compensation. As always, the older the client and the greater the capital to be insured, the higher the premium will be.

Life Savings

These, however, compensate the insured when he reaches a certain age without dying. The capital saved is formed based on the premiums paid by the client monthly or annually. In fact, it can also be the case that a single payment is delivered to achieve a fixed return.

Mixed Life

In addition to these two formulas, you can also take out Mixed Life insurance (Risk and Savings). In this case, the policy protects the beneficiaries in the event that the insured dies but also grants you an amount set by contract in the event that you survive to a certain age.