Types of life insurance

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

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. 

Types of life insurance: life-risk insurance

The main cover of life-risk insurance is death, although it can also include cover for disability or incapacity of the policyholder. 

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, until the maximum age established in the contract terms. 

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 paid directly to the bank and not to a beneficiary, with the aim of paying off the outstanding debt associated with the mortgage or loan. If the compensation is more than the debt, the remaining capital is paid to the insured person's beneficiaries.

Types of life insurance: Savings life insurance

Savings insurance is taken out with the aim of supplementing retirement or savings benefits and being able to deal with unforeseen events. In this way, in addition to covering the risk of death, it also offers a savings component, allowing the insured person to accumulate capital that they will receive on maturity of the policy.

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 accident by being able to collect the insured capital and ensures that our family has security and financial protection. This insurance is recommended if you have financial obligations such as mortgages, loans, or dependents.

On the other hand, savings insurance is recommended if you want to guarantee your financial future, as it helps you have consistent savings for the future, with retirement in mind.