Why buy Life Insurance
3 Reasons why to buy Life Insurance
One: The number one reason to have a life cover with an insurance policy is so in the event of you not being around your family are provided for.
Two: If anything where to happen to you, all your accounts would be frozen meaning any emergency bills would not be able to be paid. Having the life policy in place would mean your family would get funds within days to cover these costs.
Three: Nowadays if you take a mortgage banks usually require a life insurance to be taken out. This is in fact a good thing but of course banks charge way over the top. After the 1st year you are able to look at other insurance providers and at B-sure we have saved up to 60 % of cost for customers.
There are 3 different types of life insurance in Spain which are outlined below
1. Annual renewable Life Insurance
A form of term life insurance that offers a guarantee of future insurability for a set period of years, although premiums are paid every year on the basis of a one-year contract. As such, the premiums will rise over time as the insured person ages. This type of insurance is designed for short-term insurance needs and prices are set very competitively.
2. Term life insurance Life Insurance
This provides coverage for a specified period of time – the term of the policy. The term is typically for a 10 year period. After the term, you may renew your policy with a premium adjusted for your health and age. Your policy is paid out only upon death within duration of the term.
Term life insurance is an excellent option since you can budget for the next 10 years. With annual renewable policies there will be a price hike once a year, which is not ideal. There are no surprises if you go for a 10 year term life insurance plan.
3. Decreasing term insurance Life Insurance
Decreasing term policies are generally sold with a level premium and a decreasing death benefit. One common use of decreasing term is when you have a mortgage. The policy linked to a mortgage is designed to decrease at the same rate that your mortgage balance decreases.
This type of policy will always be annual renewable, which means the policy will have an increase with your age each year. If you choose to have a decreasing rate as described above this will offset the increase casued by your age each year.
You may choose to have no decrease in the amount insured or even an annual increase in the amount insured. This is perfectly acceptable and will allow any surplus to be paid to your beneficiaries, once the mortgage is paid back.
Frequently asked Life Insurance Questions
Should I contact the insurance company directly to save money?
In actual fact you will likely pay more if you go direct. A broker will have a book of business for life insurance. This will allow the broker to give you all the discounts available.
Do not hesitate to contact Bsure for a free no obligation quote.
What amount of life cover should I cover myself for?
If you think of what are the essential living costs per month that your family need it is possible to calculate what amount of life insurance cover would be the minimum.
A good amount to cover is for the number of years until your children reach 18 years old or for a minimum of 5 years
What is permanent and absolute disability cover?
This type of cover provides an amount to be paid out once the disability is declared and the balance upon death. An example of a disability would be lost eye sight or damage to a limb.
What is critical illness cover?
This type of cover provides an amount to be paid out once the illness is declared and the balance upon death. An example of a critical illness would be cancer or a heart attack.
Do I need disability cover or critical illness cover?
Since Covid this type of cover has increased drastically in price. I would now only recommend covering a small amount of capital.
When adding this extra cover you have the option to cover one amount for the life aspect and you can choose a lower amount for critical illness cover. This allows you to bring down the cost of the insurance.
This cover is recommended if you are in a profession where an illness would mean you were definitely unable to complete your job.
What type of questions are on a life insurance applicaiton?
Below are the key questions on any application
- Date of birth
- Lifestyle habits (i.e., smoking, drinking, how often you work out, extreme sports)
- Health history of close family members
- Financial information, including income and bank statements (if you are looking for a high amount insured)
Will the Insurance company charge more if I have a medical precondition?
If you are a smoker I would recommend stating you are on the form, since more often than not if you are in perfect health they may not put a surcharge in Spain.
If you are overweight the insurer will put a small surcharge due to the higher associated risk. This will be the same with similar conditions such as Diabetes.
There is potential the insurance company will not offer cover, if you have had recent or a serious cancer. This will also be the case if you have had a serious heart condition. Your broker will be able to give an indication, but not a definite answer on whether you will be accepted, so will always make an application for you.
Is a medical required for life insurance?
Not always. For example 150,000 euros cover for someone under 65 will not require a medical. Only a signed declaration of health history will be needed.
In the last year it has been made even easier as they send you a PIN by message to your mobile phone, so no signed application is required. The final policy will have to be signed thou and originals given to your broker.
For high amounts such as 250,000 euros then usually a blood test is required. Higher amounts than this may require a full medical check-up.