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What is Life Insurance, how it works and reasons to hire it


Feb 25, 2023

Many people still have questions about what life insurance is ! Perhaps it is not as well known in Brazil as family insurance or health insurance. But did you know that this acquisition is essential to protect the people you love in the most delicate moments of your life?

Gradually, Brazilians began to realize that this is one of the most important security products on the market.

Every year, we see dramatic events where families lose the primary breadwinner in the home, due to accidents or illness. Often, with little accumulated resources and no life insurance, they face many difficulties in the most difficult time of their lives.

What is Life Insurance?

Life insurance aims to offer economic and financial protection to the insured and their family members. With it, the same standard of living can be maintained even in the most difficult period, as it guarantees compensation to the beneficiary in the event of the death of the insured person.

This insurance is designed to financially protect those who depend on you. The people who receive life insurance compensation are those designated by the insured person, in order to protect their finances in the event of their death.

Also, for example, in case of temporary incapacity for work, the insured person himself can obtain financial support.

How does Life Insurance work?

Insurance is a contract signed with an insurance company to ensure your financial security and that of your family members at unexpected times. You can choose the coverage that meets your needs and specify who your beneficiary will be – it can be several people.

After the conclusion of the contract, in the event of any claim agreed in the policy, the insurer is responsible for paying the amount previously determined (indemnity).

In these cases, you or your beneficiary must contact the insurer and report the incident. The company will require the presentation of the necessary documents, which must be analyzed and approved before issuing the respective amount.

Remembering that it is very important that your loved ones know where insurance documents (such as insurance policies) are kept to facilitate the process.

Reasons to take out life insurance

There are many reasons to take out life insurance! Since no one can predict the future, prevention is very important. Discover now some of the advantages of having life insurance.

Financial security for dependents

In the event of an accident, life insurance is the best guarantee for your family members to have a quality life, even in your absence. Therefore, especially for those with children or whose parents are financially dependent on help, having life insurance is a guarantee.

spousal protection

In a family, especially a family with children, losing a spouse can lead to financial imbalances. Life insurance can help because the compensation will provide initial financial support until the person recovers and is able to rebalance their income and expenses.

safety to all

There are several types of life insurance, some of which have specific coverage, such as women’s insurance, which covers typical female illnesses such as breast and cervical cancer. There are also various policy values. You can choose a policy that ensures your family can have a good life without losing their standard of living in your absence.

Protection against serious illnesses

No one can predict whether they will be diagnosed with a serious illness such as cancer. In addition to the high cost of treatment, people often ask for leave. In the case of sick leave, the person continues to receive, but in general, the average salary will fall. How to maintain the standard of living in this difficult period? When life insurance covers serious illness, the person receives money that can be used for treatment and supplementary income.

Reimbursement of medical and hospital expenses

Some insurances also offer reimbursement for medical and hospital expenses. This is especially ideal for people who travel a lot. If you need to consult a private doctor outside your city of residence, you can reimburse the consultation fee in accordance with the contract.

How to purchase Life Insurance?

To take out life insurance that meets your goals and needs, you must first find a professional insurer that offers a quality plan at an affordable price.

After choosing an insurer, you must understand the coverage available and assess which is best for your family. Then calculate the insurance funds and evaluate the following factors before signing the contract:

  • The grace period of the policy;
  • Geographic scope of coverage;
  • Risks excluded;
  • The maximum amount of insured capital;
  • prize amount
  • Availability of products in specific policies.

Now that you know what life insurance is, remember that it is not a prepackaged product for everyone. Every contractor has different needs, so policies should be formulated according to your circumstances.

Now you want to know how much it costs to hire the ideal life insurance for you and your family? Discover our plans!