Life insurance: definition, concept, insured event and determination of the amount of payment

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In the article we will consider what life insurance for survival is and its features.

Among the insurance products that are currently offered to the population, special attention is paid to life insurance programs. Persons in middle and old age very often hear about such services, but so far not everyone understands the essence of such a technique. Next, consider the process of life insurance and all its subtleties.

Concept and definition

This service is one of the main types of life insurance. It involves long-term cumulative maintenance. This technique serves as a specific form of long-term cash savings.

Life insurance: what are the features?

The essence of the program is the procedure for the accumulation of funds by the insured until an insured event occurs. Client contributions are held in a special account, on whichaccrue certain percentages, which will also be paid under the contract for survival. The main feature of this program is that the accumulated money can be paid out in two cases:

1. After the completion of the policy, they provide the entire amount with accrued interest.
2. As a result of the death of the insured person, the entire amount is given to the beneficiary indicated in the application (if such a person was not declared, then to the heir).

How is a survival life insurance contract made?

It can be concluded for a group of people or members of the same family who will subsequently use this product together. The insured does not have to be the insured person. For example, an adult son will be able to issue such a policy for his mother or his grandfather.

When drawing up a life insurance contract, the state of human he alth must be taken into account. When filling out, he, in turn, must answer a series of questions that relate to his chronic diseases and other physical problems. Taking into account all the information for this person, they will form an individual program and calculate the amount of contributions. In cases where clients insist on very high amounts or long insurance periods, a medical examination may be required. In this way, the insurer minimizes the risk of entering into an agreement for terminally ill patients.

Insurance situations: death policy

How long to livein insurance can be counted?

One type of this service is a program that provides compensation in the event of death. According to the conditions, clients make an annual payment, and after the death of the insured, they receive the amount specified in the policy. In the event that this does not happen within the insurance period, then all the money paid earlier will go to the company that issued the policy.

A feature of term insurance is that the specified amount in the policy upon death is paid to the beneficiary in full, regardless of the number of contributions made earlier. Such an agreement can be concluded for any period from one to twenty years, but on condition that a person who is not older than 65–70 years old is insured.

The insurance value is set individually. The recipient of the indemnity must submit documents indicating the causes of death of the insured. Not all factors are accepted as the basis for the payment of funds. The insurer has the right to refuse to pay in the following cases:

1. When it comes to the act of suicide.
2. Death was due to a chronic disease that was hidden when receiving the policy.
3. Intentionally acting to obtain insurance.

Insured event: life insurance

How can I get this survival insurance program? This option involves the receipt of accumulated funds by the beneficiary after the death of the specifiedin the citizen's policy. According to the terms of the agreement, he must make a one-time contribution or make regular payments over a specific period of time.

In the event that the insured person lives to the age specified in the contract, the amount is transferred to the beneficiary. A feature of the lifetime program is that it acts like a bank deposit: how much has been accumulated, including interest, that is how much they pay out.

This type of insurance differs from the previous type in the absence of age and he alth restrictions. The contract is concluded with people of absolutely any age, and they may not declare that they have diseases. The application has a standard form without special applications. After issuing such a policy, an account is opened in the name of the client, where he will have to deposit money.

Contributions and payments

The amount of insurance premiums will directly depend on the amount of insurance. The frequency of payment of payments can be different: once a quarter or every six months, once a year. Some people who have entered into this type of insurance pay a one-time premium for the entire time. True, for this it is necessary to have certain means.

Such a policy acts as a kind of investment in the future. Thanks to this, you can not only accumulate money, but additionally increase it by the onset of a certain period. Thus, people are insured against the risk of death or accidents.

To the minus of the type of service in question, whichMany users note that this investment is long-term and cumulative. Considering that this type of document is new for Russia, not many clients can share their experience of its use and execution.

Payout conditions

Payment is made upon the occurrence of an insured event:

1. To the insured persons when they survive until the end of the insurance period in the amount of the specified amount.
2. To the beneficiaries specified in the agreement. They receive payments in the event of the death of the insured citizen in an amount that depends on the chosen service option: either in the amount of the sum insured, or in the number of premiums paid at the time of the client's death.

Investment example and determination of payout amount

Let's assume that within fifteen years a citizen has decided to accumulate half a million rubles. At the time of drawing up the contract, the person is a full forty-five years old. Contributions for this amount of insurance will be 30 thousand rubles annually. If a person survives until the expiration of the policy, he will receive an amount equal to 620 thousand rubles. In this case, the percentage of profitability is six. If an individual dies during the period of the agreement, then the company will pay the amount of contributions that have already been paid.

Many people consider survival insurance to be not so much good insurance in case of death or trouble as an investment. You can compare this type of service with a bank deposit. True, there will be much less red tape, and in the casedeath, it will be much easier to get money.

Pros and cons

When choosing life insurance, it is very important to clearly understand all the advantages and disadvantages of the programs offered today. Among the advantages of this choice are the following:

1. The savings scheme gives you the opportunity to save money for your family or yourself.
2. Any citizen can be a beneficiary, regardless of kinship, inheritance rights or other factors.
3. After death or expiration of the policy, payment is made as soon as possible. It is carried out immediately after the submission of the application and the required documents confirming the cause of death.
4. It is possible to choose any term of insurance, ranging from twelve months to twenty years.
5. Anyone can insure relatives and close people.
6. Compensation can be received for injuries, accidents.

Survival insurance, unfortunately, is not so perfect, it has some drawbacks, which include:

1. Age restriction (persons aged seventy-five and older are generally not insured).
2. Restricted due to ill he alth.
3. The possibility of losing the entire amount if the corresponding event does not occur before the end of the insurance period.

All the listed disadvantages are not related tolife insurance. At the same time, everything is simpler and much more accessible. A contract can be concluded by a person at any age, with he alth problems, and so on. This insurance program allows you to save money that will be useful in the event of the loss of a loved one.