Types of life insurance

You will mortgage-linked is one of the most popular insurance policies. This is because they protect your loved ones if something happens, such as you passing away, an accident or disability that does not allow you to continue generating income from work.

But, did you know there are different types of life insurance? In this article, we explain the most common life insurance options in Spain.

Types of life insurance: life-risk insurance

Life-risk insurance is the most popular and sold insurance on the market.

Its main purpose and cover is related to passing away, although the holder's disability or incapacity can also be included. 

Permanent and term life-risk insurance are the two possible options in this case. A term life-risk life insurance is offered for a specific period of time. If the insured person passes away during that period, the beneficiaries will receive the insured capital.

But, the most common is the permanent type, which means that the insurance remains in force while the premium is paid. 

It also includes a savings component, allowing to accumulate capital as of the moment established in the specific terms and conditions.

Types of life insurance: Mortgage life insurance

This insurance covers the payment of a loan in the event of you passing away or a disability due to not being able to continue working.

At the operational level, it is identical to the life-risk insurance. The difference is that the compensation in the event of death or total and permanent disability is received directly by the bank and not to a beneficiary, with the aim of paying off the outstanding debt associated with the mortgage or loan.

Types of life insurance: Life-savings insurance

Savings insurance is taken out with the aim of supplementing retirement or savings benefits and being able to deal with unforeseen events.

Unlike life-risk insurance, in this case, the policyholder, insured person and beneficiary of the policy are the same person.

Which is the most suitable type of life insurance for me?

As mentioned earlier, life-risk insurance protects against any unexpected accident by being able to collect the insured capital. And savings insurance is a way of saving for the future, thinking about retirement.

Do you need life insurance? We don't consider taking out life insurance until we take on financial obligations, such as a mortgage, loan or dependant. And savings insurance helps us constantly save for tomorrow.

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