Life insurance

Life insurance

A life insurance pays a pre-agreed amount in the event of death or permanent disability. This insurance is suitable if you want to leave your family, company or business partner behind well.

"A life insurance with a mortgage only covers the mortgage, not the income."

It is often thought that people have already taken out good life insurance with the mortgage. But in practice, nothing could be further from the truth. For example, we often come across that your house has been paid in the event of an accident, but not in the event of death due to medical reasons.

What type of life insurance is available?

Death has a standard coverage in a life insurance policy.
Although, you can opt for coverage in the event of death in all circumstances,
There is an additional coverage possible in the event of death by accident of a traffic accident.
In addition, there are 3 options to insure against work incapacity:

1.100% permanently incapacitated for work and therefore never able to work again, regardless of the cause.
2.100% permanently incapacitated for work and therefore never able to work again due to an accident.
3. Insurance against never being able to practice a predetermined profession again.

It is also possible to insure for a one-off benefit in case of serious illness. If you get a serious illness and are no longer able to work, you will receive a payment with this insurance.
If you survive this serious illness, the amount paid will be deducted from the death risk payment.

How can I calculate my life insurance amount?

Calculating a life insurance benefit can seem tricky, but there are good (indication) formulas for it.

Example, you are 39 years old and you earn € 30,000 (gross) per year:
You want to insure until your 67th (retirement age) for death and disability.
In both cases (with a good life insurance policy with your mortgage), the house will be paid immediately and these bills will disappear. A mortgage is a maximum of 1/3 of your gross salary and we also assume this in these formulas.

Formula for calculating the insured amount on death:
67 (retirement age) - 39 (example age)
= 28 (years to be insured).
28 x € 20,000 (2/3 of example gross annual wages)
= € 560,000 (amount to be insured) *

*The insured amount is gross, just like your salary, because a death tax is also levied on death. (The amount depends on your financial situation),

Formula for calculating the insured amount in the event of disability:
67 (retirement age) - 39 (example age)
= 28 (working years to be insured)
28 x € 20,000 (2/3 of example gross annual wages)
= € 560,000 (amount to be insured)

With the “Seguridad Social” you (as an employee) will also receive (often low) benefits in the event of disability. You can deduct this payment from the insurance amount. We always assume about 25%.

Entrepreneurs often receive a slightly smaller benefit from the “Seguridad Social”. We always assume a 20% for entrepreneurs.

You insure as an employee for:
€ 560,000 - 25%
= € 420,000 (amount to be insured) **

You are insured as an entrepreneur for:
€ 560,000 - 20%
= € 448,000 (amount to be insured) **

** The insured amount is gross, just like your salary, because an income tax is levied on death. (The amount depends on your financial situation),

Why IFAR?

We at IFAR are an independent insurance broker and work with more than 20 leading insurers in Spain. This allows us to compare all prices and offer the most suitable offer.
We will speak to you in your own language and discuss all your options.
And of course, completely free of charge and without obligation.