Perhaps we should first realize what life insurance is for. Above all, it is intended to cover the life-threatening risks of serious illness, disability, death or permanent consequences of an accident or incapacity for work. If you have a minor injury with which you are at home for a few weeks, your own financial reserve of the family is probably enough. It is useless to arrange life insurance for him.
This policy should primarily be purchased by a person who is financially dependent on other people, ie wife, and children. And it is doubly true whether this person is repaying something and in the event of death, the repayment would have to be provided by the survivors. And we do not have to think of the worst, there are serious health problems that could put the family at risk if the main source of money for the family cash could not earn a long-term profit.
What to insure?
Before you close the policy, well discuss what can be insured, so what do you do for life insurance? As we mentioned, the greatest risks are disability and death. In one contract, you can also have additional insurance, such as the risk of permanent consequences of injury, serious illness, disability. Covering daily benefits due to injury, illness or hospital stay may also be included.
Experts shake their minds that people, for example, arrange accident insurance, but completely incomprehensibly overlook disability. And we agree that disability has far greater consequences for each of us than a broken leg. Also, statistics are inexorable – disability encounters a person of every fourth person during a productive age. Thus, any well-designed life insurance contract should provide for disability. Covering the risk of death is then very individual.
The second step in creating a life insurance contract is to set the optimal level of coverage. This is the money you get if something happens. So you need to consider how much you want and can invest in life insurance on a monthly basis. It is relatively easy to figure out how to set your insurance limits: you need to know how much you will pay for the insurance and how much money you will get from it if an insured event occurs. So when someone insures a case of death and you pay a few hundred a months, then when it happens (without anyone wishing it), the family will receive several thousand crowns from the insurance company, which is certainly not the optimal insurance result.
Additional risks? Of course!
As we have already mentioned, people are fulfilling life insurance policies with accidental risks, daily allowances and similar forms of pain. But this actually does not have much in common with life insurance. Its purpose is to ensure a loss of income or to pay for treatment or rehabilitation. If you break your arm, you will certainly find a few hundreds worthwhile, but they will not be enough for something serious. Definitely, do not forget about sickness insurance for the amount of money that the financial thorn pulls out of your heels.
How much will it cost?
The total amount you pay for insurance depends on many things – for example, the number and type of covered risks or the amount of insurance coverage. Also important is age, health and your profession , whether you smoke or do sports. Experts recommend giving priority to falling insurance premiums over fixed ones, especially for the risk of disability and death. Falling sums are also much cheaper and copying the need for insurance coverage – one needs to be insured mainly at the early stage of living a family, repaying loans and not having financial reserves. Amounts range from CZK 500 to CZK 2,000 per month.