When you buy your house and finance it with a mortgage, the bank usually offers you life insurance and the decision to take it out often depends on how much it will improve the credit conditions for you. We do the math and study whether it will be worth it, but that is not the only analysis we have to do; what is really important to take into account before taking out life insurance?
Ask yourself these questions:
1. Is anyone financially dependent on me?
2. If something happens to me, will I leave debts that my heirs will not be able to pay?
3. Will the people in my care be able to live well on the income they will have left?
4. If I had a disability that prevented me from working, could I live comfortably financially?
Nowadays we insure our mobile phone in case it breaks or is stolen, isn't it more important to insure our life? Comparing the costs of these two insurances and what they give us in return, in the first case a new mobile phone, in the second, leaving our loved ones with a certain financial security, or at least not leaving them with debts that they cannot afford, I personally prefer the second.
Why is life insurance important?
The true value of insurance is not only the benefits it offers, but also the peace of mind it gives you and your family. Taking out insurance is not a decision because “it won’t serve any purpose”, it should be decided “for the peace of mind of everyone”, both the insured and the rest of the family members.
If something happens to us by unfortunate chance, we can be sure that it will have the least possible impact on the lives of our loved ones, knowing that they will be able to continue with their projects: study a career, be able to live in the same house, go on vacation, maintain a well-being, take a trip, change cars, etc.
We should also not forget that it is advisable to take out life insurance with Absolute Permanent Disability coverage because an accident or serious illness can prevent us from continuing to work and, in these circumstances, we may also need expensive assistance and treatment.
When is it time to take out life insurance?
It is advisable to take it out when you are young and in good health, as the premium will be lower. Although it is also advisable to do so at important times in our lives, such as when children arrive or to ensure our old age.
Likewise, throughout our lives, we can take out this type of insurance when contracting other services, such as a home loan, car financing, a credit card for certain payments or the financed purchase of a household appliance. In addition, in some cases, our company may provide us with insurance for being employees.
How do I know if the deceased had life insurance?
Often, heirs or beneficiaries are unaware of what insurance their deceased relative had. For some years now, there has been a Registry of Insurance Contracts under the Ministry of Justice that allows us to obtain information and collect the contracted capital. You can consult it at this link .
Life insurance is a complement to controlling the risk of having a loan, but it is also the price of living in peace.
Finally, I leave you with a modest piece of advice that I give myself: let's enjoy being with our loved ones; sometimes we forget that what's important is very close to us.
Luis Herrán, Director of Insurance at UCI