Life insurance is one of the types of people insurance that the payment by the insurer of the amount stipulated in the contract is made dependent on the death or survival of the insured at a certain time. It is convenient in this form of insurance to delimit the concept of the Insured, whose life depends on the payment of the capital, in order to oppose it to that of the Contracting Party, which is the one that subscribes the insurance and pays the premium (it can coincide with the insured) and the Beneficiary.
The Beneficiary is the person who will receive the capital paid by the insurer. Life insurance can be classified from different points of view, but, in essence, according to the nature of the risk, there are two main modalities:
Insurance in case of life: the beneficiary will receive the capital if the insured lives on a certain date.
Insurance in case of death: the beneficiary would receive the stipulated capital account upon the death of the insured.
The combination of these two modalities gives place to the so-called Mixed Insurance.
Insurance for life case (or survival)
This guarantees the payment of a capital or income to the beneficiary that is normally the insured, only if he / she lives on a specific date or age.
The basic types of this type of insurance (also called Savings Insurance) are:
Deferred Capital: The insurer undertakes to deliver the insured capital at the expiration of the agreed term as the duration of the contract if the insured lives on that date. It can be without refund (if the insured dies before the end of the insurance, the premiums are paid by the insurer), or with reimbursement (these premiums are returned if the insured dies before the insurance ends)
Immediate Life Annuity: In this modality, the insurer, in exchange for a single premium, guarantees the immediate payment of an income to one or more persons until the death of the insured, in which case the payment ceases. The life annuity can be constant (of the same amount each due date) or variable (increasing decreasing, with the passage of time).
Deferred Income: In this case the insurer agrees to end the stipulated deferral period, to pay the insured while alive, a constant and periodic income. It can be without refund of premiums (if the insured dies before starting to collect the rent, the insurer retains the first ones satisfied), or with reimbursement of premiums.
Capitalization: It is a form of life insurance savings, by which the contracting party or insured commits to the satisfaction of a capital at the expiration of the contract.
The first and third of the above modalities give rise to Retirement Insurance, which consists of the payment of a capital or income, deferred in its payment until the insured reaches a predetermined retirement age. If it were a deferred capital insurance, there is the option of transforming it into a life annuity from the moment of retirement. Generally, it is contracted with increasing annual premium, according to the economic possibilities of the insured.