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Types of life insurance to save

Life insurance is not only contracted thinking about that moment in which you are absent. It is also done thinking about how to enjoy retirement with the family. Because what it is about is setting up a fund for the future, which can complement the public pension and guarantee economic well-being.

But life-savings insurance is still considered like the other types of life insurance. Because (and this is what they all have in common) they regard death as an insured risk: if the policyholder dies, it is the beneficiaries who receive the accumulated fund and an additional capital, guaranteed for this case.

When we talk about types of life insurance to save, we mainly talk about these options:

PIAS

They are the acronym for Individual Systematic Savings Plans. Basically, based on a series of contributions (they cannot exceed 8,000 euros per year), it is about saving for the future (up to 240,000 euros). But it is about seeing those savings grow, through investment (which is handle by the bank or financial entity). At the time of redemption, you collect the savings and the benefits (if any, because they are not always guarantee). And you benefit from tax advantages.

In addition, they allow redemption at any time, after the first year of validity (although with certain penalties). But they are also another type of life insurance that you can take out because they contemplate an additional capital for death, which the beneficiaries receive. If you want to know more, do not miss this complete guide that we have prepare analyzing these savings plans in depth:

PPP

PPAs are Advance Pension Plans. This is a lower risk type of life-savings insurance, since a return on savings is guarantee through a previously agree fix interest rate. Although redemption before retirement is not allow, except in serious situations (such as in a pension plan): disability, dependency, serious illness, long-term unemployment and death.

Another difference with the PIAS is that in the PPAs the total amount saved is not limited, although the annual contributions are (between 10,000 and 12,500 euros, depending on age). What they do have in common is the fact that they offer tax advantages.

SIALP

The Individual Long-Term Savings Insurance (SIALP) is a recently created product (2015). It is also known as a Savings Plan 5. We are talking about a fund of money that is built up and that is associated with life insurance (although it can also be associated with a bank deposit, in which case we would speak of a Long-Term Individual Account, CIALP).

The SIALP is just another form of long-term savings. And with attractive advantages, since the capital receive is exempt from tax if certain requirements are meet. It is a life-savings insurance in which a return agreed in advance is guaranteed.

But it is also a type of “plain” life insurance, because the risk of death is consider. In this case, it ensures the collection of the capital saved in the event of the holder’s death before the deadline set for the completion of the SIALP. In fact, the beneficiaries receive 101.5% of these contributions.

Unit Linked Insurance

They are a type of it combine with investment. The insurer is the one in charge of these investments, with which the objective of increasing savings is pursue and the insure assumes the risk (there are different levels of risk).

In addition, they allow the redemption in part, since it is possible to liquidate the benefits. In the event of death, the beneficiaries are guarantee those savings plus the benefits obtain. If you are interest in this type of it, do not miss our guide:

Other types of life insurance

There are other types of it, beyond the best known. And that they use other formulas, halfway between life-risk insurance and life-savings insurance. We see them briefly:

Mixed life insurance

It is a hybrid of life-risk insurance and life-savings insurance. In this type of policy, a sum is guarantee that the beneficiaries will receive either if the policyholder dies before the agree term (the end date of the insurance), or the policyholder himself, if he survives. That is, the payment of compensation is assure.

It is possible to find different types of mix life insurance: simple, complete, double, variable and revaluable.

Life annuity insurance

It is about guaranteeing the collection of a periodic life annuity (monthly, quarterly, semi-annual or annual). To obtain a life annuity, a single premium or extraordinary contributions must be pay. The insure will receive an annuity (according to the capital contribute and the return offer) until the moment of his death.

Annuity insurance may also include death coverage. If the policyholder dies while the insurance is in force. It is the beneficiaries who receive a percentage of the premium contribute, if so designate.
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