Hire the best life insurance that suits your needs

 When we form a family, we do so with the illusion of providing our loved ones with a full, dignified, full and happy life. This necessarily implies contracting with them a moral commitment: to give them love, affection, food, shelter, clothing, health, distractions, education, protection, etc.

However, since that commitment depends on our permanence in the world, we have the responsibility to protect them in case we fail, through mechanisms that ensure the continuity of their standard of living for a while, until they can fend for themselves or generate income for themselves.

Having life insurance is essential if we are the breadwinner of the family and have heavy debts, small children, economic dependents or if any of them cannot be independent.

Life insurance can be classified into three large groups, depending on the needs of each person or family:

Ordinary life insurance. It is a plan that provides lifetime protection and is based on the assumption that the insured will pay premiums until his death.

This insurance is relatively expensive, since there is certainty that the risk of death will actually occur.

In ordinary life plans, the premium paid has two components: one part serves as a reserve to build, over the years, the insured sum that one day will have to be paid. The remainder is the part that is paid to cover the risk of premature death.

There is also a variant called life limited payments, in which the premium (much higher) is paid for a certain number of years, at the end of which the premium is considered paid in full and grants lifetime protection.

Temporary life insurance. As its name indicates, it provides protection for a limited number of years, paying the corresponding insured sum only if the death of the insured occurs during the contracted term.

This insurance has the advantage of being cheaper, since the premium is calculated based only on the probability that the insured dies during the term of the insurance, according to her age and taking mortality tables as a reference.

In addition to offering us protection only during the time we really need it, some companies offer us the possibility of automatic renewal, without the need for a medical examination, in case we still require it when it expires.

Endowment life insurance. The word endowment comes from dowry, that is, to receive an amount of money. There are two types of endowment insurance:

1- Pure endowment. These are actually survivorship insurance, in which the insured sum is not delivered upon the death of the insured, but only if he survives at the end of the contracted term. Due to their characteristics, they are not plans that are promoted much in Mexico. They are generally contracted for short terms and can be seen as an investment.

2- Mixed endowment. It is a combination of a pure endowment, with a term life insurance. Some insurers sell them as retirement or retirement plans and others as a universal line. They have the basic characteristic that the insured sum is delivered if the insured dies during the contracted term, or if he survives at the end of said term.

The premiums for these insurances are high, since they have two components:

a part is invested to constitute the insured sum that will have to be paid at maturity and another part is that which corresponds to temporary insurance, which serves to cover the risk of dying before the agreed period.

Mixed endowments must always be contracted in currencies that protect the purchasing power of the insured sum, since they are very long-term commitments and a peso will not be worth the same now as it will be in 30 or 40 years.

For this reason, insurers offer plans in dollars, in Udis or in monetary units created by themselves and registered with the National Insurance and Bonds Commission (CNSF).

The decision about which type of life insurance we should buy depends on our financial needs and the amount of premium we can afford.

People who unfortunately have children with a disability that prevents them from generating an income for themselves, probably require protection for life and with a high insured sum.

However, if one has the habit of saving for retirement and our children have ample possibilities of development, surely we will only require temporary insurance.

For people who find it very difficult to save in any other way, a mixed endowment may be an ideal protection and investment alternative for them.

General factors that are considered at the moment General factors that are considered when determining the premium for life insurance:

• Age: the age at the time of requesting the insurance is taken into consideration, the older the age, the higher the premiums.
• Gender: it is taken into consideration for the purpose of mortality tables and to know the life expectancy by gender.
• Medical history: the insurer generally requests information related to the state of good health and requests access to medical records, in addition to blood tests, urine and medical examination. Pre-existing conditions are taken into consideration.
• Personal habits: bad habits are taken into consideration, such as smoking, consumption of alcoholic beverages, user of controlled substances.
• Occupation or profession: Occupations or professions that can be considered dangerous are taken into consideration, such as police officers, firefighters or pilots.
• Hobbies: dangerous hobbies that can be practiced, such as skiing, mountain climbing or parachuting, are taken into consideration.
• Credit history: Some insurers may consider credit history for life insurance whose benefit amount is significant. However, credit history cannot be used as the sole basis for refusing to grant life insurance, unless the insurer has substantial supporting documentation that the credit history is significantly related to the insured risk or in the process of being insured, or that the credit history of the applicant or insured significantly increases the risk that is insured in the policy.

Frequently, in insurance policies, we come across some terms with which we are not familiar. For this reason, at Rastreator we have prepared a basic glossary of this type of terminology, in order to make it easier to understand the life policy and your decision when choosing the type of life insurance that best suits you. your needs. This will not be a general glossary of all insurance-related terms, but rather a small dictionary of terms specifically related to life insurance.

• ACCIDENT. Fortuitous and involuntary event that occurs suddenly and violently, causing damage to people or things.
• WORK ACCIDENT. Damage or injury caused by an accident to the worker while doing his job. If it occurs on the way to or from work, it will be an accident in itinere.
• TRAFFIC ACCIDENT. Damage or injury caused by an accident involving a motor vehicle.
• AGGRAVATION OF RISK. Situation given when, due to certain events, the risk covered by a policy becomes more dangerous than initially foreseen in the contract. The insured must inform the insurer of this fact and the latter will choose between continuing the coverage by applying a corresponding surcharge on the premium or rescinding the contract.
• CAPITAL REPAYMENT. Depreciation of the insured capital, which is smaller with each annuity. This type of amortized or decreasing capital is usually contracted for mortgage life policies, in which the purpose of the policy is to cover the amount.
• CAPITAL ADVANCE. Partial payment, normally on account, and that is made in advance on the date set for the payment of the principal. These types of advances can be covered in life insurance policies for eventualities such as burial expenses, payment of inheritance and succession taxes or terminal illness expenses.
• POLICY CANCELLATION. Cancellation of the policy due to the circumstances provided for in the contract, agreement between both parties or unilateral decision of any of them. If it is a CANCELLATION WITHOUT EFFECT, it occurs when the policy is canceled from the beginning.
• BONUS. Discount or improvement in the price of a premium when certain requirements are met. It normally has the nature of a reward for the conduct or activity of the insured, leading to a reduction in the number of claims or their intensity.
• CAPITAL. Value attributed by the holder of an insurance contract to the goods covered by the policy. The amount of the insured capital is the maximum amount that the insurer is obliged to pay in the event of a claim.
• CONSTANT CAPITAL. It is the insured amount, which will be the same throughout the entire term of the policy.
• DECREASING CAPITAL. It occurs when the insured amount decreases as the annuities elapse and the covered risk also decreases. This type of life policy with decreasing capital is very common when a life policy is taken out to cover a mortgage.
• DOUBLE AND TRIPLE CAPITAL. The amount of the compensation will be double, or triple, in the event that certain requirements set out in detail in the policy are met.
• DEATH. Death. It can occur NATURALLY, BY ACCIDENT, or BY ROAD ACCIDENT or BY SUICIDE, there being four different coverages within life insurance to deal with compensation for death occurred for each of these four causes.
• SERIOUS DISEASES. Pathology of a special gravity. Traditionally, the most covered serious illnesses tend to be non-exhaustive: cancer, myocardial infarction, cerebrovascular accident and coronary artery bypass grafting.
• INABILITY. Impossibility that a person has to develop her functions normally. Depending on its duration, it can be TEMPORARY or PERMANENT. In the case of the extension, it distinguishes between PARTIAL and TOTAL. It can also be an inability to do our usual job or an inability to do any kind of work.
• COMPENSATION. Amount to which the insurance company is obliged to pay in the event of a loss covered by the policy. Depending on whether that amount is paid at one time, it will be a SINGLE INDEMNIFICATION; in the event that it occurs through periodic payments, it will be INDEMNIFICATION FOR INCOME.
• DISABILITY. It is synonymous with inability, that is, the impossibility of a person to normally develop their functions. In life and accident insurance there is usually coverage related to ABSOLUTE AND PERMANENT disability, which is a degree of total disability, which disables the worker to develop any type of profession or trade. This absolute degree of disability can occur FOR ANY CAUSE, BY ACCIDENT, BY ROAD ACCIDENT or BY ATTEMPTED SUICIDE.
• INSTALLED PAYMENT. Possibility of paying the premium in several periods.
• WAITING PERIOD OR TERM. Period between the time the policy is formalized and a certain later date, during which the guarantees provided for in the policy do not take effect.

Life insurance aims to obtain by the beneficiary an economic benefit when the insured risk occurs.

The insurer undertakes to pay the policyholder or another designated person (beneficiary), a capital or an income in the event of death or survival after the term determined in the policy.

The basic coverage of this type of insurance is, therefore, death and survival:

Death insurance: They are those that guarantee a capital or income in the event that the insured dies within the period of duration of the insurance.

Deferred or survival insurance: These are policies that guarantee the beneficiary the payment of capital or income on a certain date, provided that the death of the insured has not occurred.

Mixed insurance: The insurer alternatively covers the risk of death and survival of the insured, guaranteeing a capital or income at a certain date and another capital or income, which may or may not be equal to the previous one, in the event that the insured dies during the duration of the insurance.

It is common to find complementary guarantees such as permanent disability or double capital due to accident.