When someone dies, the emotional burden on their surviving dependants can be enormous. And to make matters worse, they might also be left struggling with financial problems. With death benefits insurance, you can ensure that the beneficiary is still able to afford the mortgage and pay for your children’s education, for example, or that they can continue running a business that you own together. In this interview, our pension expert Nadia Abdelli provides answers to the most important questions.
Nadia, how would you describe death benefits insurance in two sentences?
This form of insurance pays out quickly and reliably in the event of death. If the insured person dies, the beneficiary will receive the sum of money that was agreed beforehand in the policy.
To whom would you recommend death benefits insurance?
Basically, to anyone who wants to protect their nearest and dearest from the financial consequences of death. Beneficiaries can include family members, spouses or cohabiting partners. If someone is self-employed, they can even specify people from within their professional circle as a beneficiary.
When is death benefits insurance crucial?
If you have big financial commitments, you should definitely consider taking out death benefits insurance. When deciding, ask yourself the following questions:
- Are you the main breadwinner and your family might experience financial difficulties if you were to die?
- Are you self-employed and would like to ensure that your business can keep running if you die, and that your business partners will be protected?
- Do you own your own home and want to protect the mortgage repayments, so that your family can continue living there after your death?
If you have answered “yes” to any of these questions, then death benefits insurance definitely makes sense for you.
What are the different types of death benefits insurance?
If you die, the beneficiary will receive the agreed sum insured. This amount will depend on your chosen insurance variant:
- Constant sum insured: If you choose this form of death benefits insurance, the amount will remain the same for the entire term of contract. It is a sensible option if the beneficiary will have to pay off a loan or mortgage after you die, but not directly (i.e. in instalments).
- Declining sum insured: With this variant, the amount agreed in the policy gradually decreases each year. I would recommend this option if you want to cover the regular payments for a second mortgage that is continuously amortised. Or to fund your children’s education in the same way.
Are the benefits of death benefits insurance only paid out in the event of death? Or are there other options?
Our death benefits insurance can be taken out with supplementary cover. If the insured person is going to live for less than 12 months due to an illness or accident, and can provide a medical certificate to prove this, it is possible for them to receive an advance withdrawal of the lump-sum death benefit as a lump-sum disability benefit.
The insured person is free to decide how to use the money, whether as a gift, to settle debts, or to make their last wishes a reality.
Generali tip: How well protected are you and your loved ones? Find out with our pension calculator. The assessment takes less than five minutes. In just a few clicks, you will know if your nearest and dearest would face financial difficulties should you become disabled or die. Our pension experts will be pleased to advise you.
About the author
“Death is an unpleasant topic that no-one likes to think about. But the situation could be even more unpleasant for your loved ones if they are not protected in the event of your death. As a general rule, it is always better to plan ahead than to deal with problems after the event.”
Nadia Abdelli, Pension expert
Nadia has a Bachelor of Science in Business Administration. She has been working in the insurance industry for more than 18 years, eight of which she has spent with Generali. Nadia is an examination expert at the Swiss Insurance Industry Vocational Training Association (VBV).
