What should I know about life insurance?
You want to build up savings or make sure that it will be passed on to your loved ones. A life insurance policy may meet your needs. Be aware, however, that there are different types of life insurance contracts. Consult our questions and answers and our sections dedicated to PER Insurance or funeral insurance to discover and understand them.
What are the different types of life insurance policies?
There are four main categories of life insurance contracts that meet different objectives.
“Savings-type” life insurance policies
They allow the subscriber (or the member for so-called “collective” contracts) to build up savings and to transfer capital on his death to people he has chosen, “the beneficiaries.”
Temporary death or whole life death insurance contracts
These are life insurance contracts (because they depend on the length of human life) whose amount of guaranteed capital is not linked to savings made up by the subscriber or member. These contracts follow specific rules.
Retirement savings plans (PER Assurance) and supplementary pension contracts
See our dedicated section: PER insurance and supplementary pension contracts to find out all about these contracts.
Funeral insurance policies
These contracts meet specific needs and are subject to particular regulations.
What is a life insurance policy?
An insurance contract in the event of life aims to build up savings: the insurer undertakes to pay capital or an annuity on a given date if the insured is still alive on the fixed date, c, i.e., at the end of the contract.
Insurance in the event of life, for example, allows the insured to build up savings to acquire property or supplement their income.
The sums paid by the subscriber are invested in one or more financial vehicles (funds in euros, units of account, euro-growth, or growth funds).
Note: in life insurance, the insured’s death before the date fixed in the contract releases the insurer from any obligation. As a general rule, the agreements provide for death counter-insurance to allow the transmission of the savings to the designated beneficiary (these are mixed life insurance contracts).
What is a “mixed” life insurance contract?
A mixed life insurance policy includes both an “in the event of life” guarantee and an “in the event of death” guarantee.
In this type of contract, the insurer undertakes to pay:
– The savings constituted, in the form of an annuity or capital, to the insured if the latter is alive at the end of the contract;
– The capital to the designated beneficiary(ies) if the insured dies before the end of the contract.
Most life insurance contracts contain a guarantee in the event of life and a guarantee in the event of death (death counter-insurance), i.e., in the event of the end of the insured, the savings constituted is paid to the designated beneficiary(ies).
Who can take out a life insurance policy?
Anyone can take out a life insurance policy. However, insofar as the subscription of a life insurance contract engages the subscriber’s assets (in law, we speak of an “act of disposal”), the law has provided for protective measures in certain situations:
- If the subscriber is a minor
A non-emancipated minor child cannot take out a life insurance contract independently. He must be represented by the person(s) exercising parental authority (legal representatives).
- If the subscriber is an adult under guardianship
An adult under guardianship can take out a life insurance contract with the authorization of the guardianship judge (now called protection litigation judge) or the family council.
- If the subscriber is an adult under curatorship
An adult under curatorship can take out a life insurance contract with the assistance of the curator: his signature is necessary for the contract to be valid. Otherwise, the agreement is considered void.
Life insurance: how does the premium payment work?
The subscriber pays premiums (also called “contributions”) to his life insurance contract.
Depending on the arrangements, the contract can be funded in different ways. You can :
- pay a single premium ;
- make an initial payment, then supplement with free payments (additional payments) and set up scheduled free payments.
The frequency of scheduled free payments can be annual, half-yearly, quarterly, or monthly, depending on the subscriber’s choice. In this case, you agree on the amount paid and the payment frequency.