When we think of life insurance, a death and immediate family members collecting the insurance premium usually comes to mind. But this is not always the case. There are 3 cases in which the insured receives the life insurance money. In this article we will tell you what they are and why life insurance is a great investment, also for yourself.
Why it is important to know the 3 cases in which the insured receives the insurance money
In 2021 in Spain there were 953 591 people with a recognized permanent disability. The maximum amount that a percentage of them received from the Social Security was less than 950 €. And this is only in some cases, since most pensions are less than this amount. These data are a clear reflection of the fact that having a life insurance policy that covers disability is essential to be able to have a comfortable life on a material level.
The mechanism by which life insurance can be collected without the death of the insured is to add a series of additional coverages to the traditional policy (the one that indemnifies the family members if the insured dies).
These are the three cases in which these coverages can be activated, as long as you have them contracted in your life insurance policy:
1.- If you have an occupational disability.
This insurance policy is designed for people who suffer a disability to exercise their profession. This means that, although this disability does not make it impossible for them to lead a relatively normal life, or even to work, their illness or accident means that they cannot carry out their usual work, that is to say, the profession they were carrying out up to that moment.
This is known as total disability for the usual profession. It can be caused by an accident at work or by another condition. For this disability to be granted, the affected person’s performance has to be less than 33% of his or her capacity. And this, in many cases, means that the person can continue to work, but not exercise his or her usual profession. Some examples could be: a pianist who has suffered an accident in which his hands have been affected, a driver who, due to a medical condition, can no longer drive, or a surgeon who cannot operate.
2.- If you suffer an absolute and permanent disability
Permanent disability (or incapacity) is a condition produced either by an accident at work or by a chronic illness, which does not allow us to return to a working life like the one we had before.
Disability is evaluated and prescribed by the Social Security, it is not a decision made by the insurance company. And, as defined in its statutes, “a worker suffers a permanent disability when, due to a medical treatment or a health problem, once he/she has been discharged, he/she suffers from serious anatomical functional reductions, foreseeably definitive, that diminish or annul his/her working capacity. If you need more information about the procedure to apply for the permanent disability pension and general information about it, you can do it in this link.
In the case of permanent disability, the Social Security will pay the person in this situation an economic benefit to try to cover the loss of income. But the reality is that, with this pension, the person suffers a significant loss of purchasing power. That is why it is so important to take out a life insurance policy with coverage adapted to this type of situation.
Levels of disability
There are different levels, or types, of disability.
Partial permanent disability: This is another name for occupational disability.
Total or absolute permanent disability: The person affected by this disability cannot work. He/she cannot exercise his/her usual profession, nor any other profession.
Major disability: The affected person cannot work, nor can he/she look after him/herself, and needs help with daily tasks, with personal care and in order to be able to look after him/herself.
3.- In case of serious illness or cancer.
This is a specific coverage of some life insurance policies known as “critical illness coverage”. The person who takes out this policy will receive an indemnity to help him or her cover the large expenses incurred if he or she suffers a serious illness. The illnesses that are covered by the insurance policies are specified in the coverages, and are usually: some types of cancer and heart disease. In the case of women, there are specific policies designed for women’s health that cover diseases suffered only by women, such as cervical or breast cancer.
Is the public pension sufficient in case of disability?
The pension you receive from the Social Security in the event of a disability is not enough to cover your living expenses, let alone to maintain a good standard of living. Specifically, for a self-employed person with a permanent disability, your Social Security pension will almost never exceed 800 €. This amount is even lower if the disability is occupational.
It is very important that you find out about the different types of life insurance available on the market, and in particular with these specific coverages. You can do so by consulting our comparator. There you will see very clearly the different prices, services and coverages, and you will be able to decide which one is the best for your situation.
That is why, a life insurance policy that covers these three cases in which the insured receives the life insurance money, will be essential to be able to have a peaceful life without economic worries.