Life Insurance coverage
Life insurance is one of the most important insurances a person can have. This is because the unpredictability of events makes risk part of our lives. These products are financial protection instruments for both the beneficiary and his family.
Coverage refers to what is guaranteed through life insurance.
Disability coverage refers to what is guaranteed through life insurance. In addition to the risk of death, insurance can also cover accidents and illnesses that result in disability. Disability coverage can therefore be very important in selecting the best and most appropriate life insurance for your specific situation. We have already seen protection life insurance, life insurance associated with mortgage loans and also life insurance that covers the risk of death and the risk of survival.
Another important typology of life insurance is related to disability coverage: Total and Permanent Disability and Absolute and Definitive Disability.
- Total and Permanent Disability: the insurance pays the agreed amount if, due to an accident or illness, the insured person is incapable of exercising his profession. This is when the degree of disability is equal to or greater than that indicated in the insurance. This incapacity must be declared by a recognized physician.
This option is more comprehensive than the Absolute and Definitive Disability option.
- Absolute and Definitive Disability: in this case, the insurance pays the contracted amount if, due to an accident or illness, the insured person becomes totally unable to exercise a remunerated profession, being also dependent on the assistance of other people to satisfy the most basic needs (for example, dressing, bathing and eating).
This option only covers very serious situations.
In the next article, we will talk about how to choose a Life Insurance.
Vítor is a CFA® charterholder, entrepreneur, music lover and with a dream of building a true investment and financial planning ecosystem at the service of families and organizations.