For everyone it is quite easy (and common) to confuse funeral insurance and death insurance.
The funeral insurance is related to funeral funding, or even the costs related to their organization (casket or urn, ceremony, care and preparation of the body, transport of the deceased, the repatriation of the body and the financing of the trip of relatives to the place burial, gravestone, but also announcements, digging of the pit, the concession …).
Death insurance means providing for the payment of a capital (or annuity) to a beneficiary in the event of the death of the insured person before the end date of the contract. You will then have to choose a fixed-term contract (10 years, 15 years, 20 years) and withhold an amount to be paid to the beneficiary. These two variables, associated age that you have when you subscribe, determine the amount of contributions. Let’s take an example with a 15-year contract. If the insured dies after 12 years, the agreed sum will be paid to the beneficiary. On the other hand if after 15 years, the death did not occur, the sums committed will be lost for you (serve to cover the expenses of the others). As you can see, life insurance is recommended for those who are still young people who live in the home (the highest income of the home for example) and want to protect their family in case of premature death in the face of a financial commitment (taken from 15 years for example). Banks often offer you this type of contract when you buy a loan and want to avoid this risk. However, you may also want to buy life insurance when you have dependent children and you want to avoid the risk of your premature death, which can jeopardize their future (funding of studies …).
Next article: If your goal is to build capital to be passed on to a loved one after your death, it is life insurance that must be built. You save according to your rhythm and once the moment of death, the beneficiary will receive the capital saved.