What Would Happen If...

At Getsafe, we have an average age of 32. If you consider the average age when people in Germany have their first child (30), get married (33) and buy their first home (40), you can see that we’ve got plenty of exciting events to look forward to.

For many people, these events are also the first time that they take on a certain level of financial risk.

You might find yourself in this situation at the moment. Perhaps you’re a new parent and you’ve got plans to make a large investment over the coming years. In this situation, it’s a good idea to consider “what if?”. We all like to think we’re going to live forever, but what if the worst happens?

In this article, we explain what term life insurance is and how it works.

What is term life insurance?

Term life insurance covers those who depend on you financially in the event of your death. If something happens to you, those you leave behind (a partner, spouse, or child) receive a fixed amount of money – known as the death benefit.

As the name suggests, term life insurance runs for a fixed term. It only pays if a person insured by the policy passes away. The death benefit is then paid out as a lump sum to any beneficiaries listed in the policy. This brings us to our next point.

Why does it make sense for families to think about this insurance?

Some people are quick to criticise certain types of insurance on the market. Interestingly, this is not the case with term life insurance. But why?

Because there are times in life where an extra safety net makes complete sense.

When you start a family, it’s natural for you to think more about protecting your loved ones. After all, supporting a family can be expensive. You’ll have to consider uncomfortable questions like: “How can I ensure my partner is looked after should something happen to me?” Life insurance means you can live your life without having to worry about such issues.

How is the price of term life insurance calculated?

The first step is determining the amount of your death benefit. This is the amount payable to your loved ones should you pass away. Consider these questions: How long would you need to compensate for your income? How much money is needed to ensure your children get a good education? Are there any existing loans that need to be taken into account? These are all important factors.

But how much does it cost? Typically, this depends. As with many other things in life, there are many factors that play a role here.

• How long is the contract?
• Are children also covered?
• What risks are associated with insured person’s lifestyle or age, for example?

When does term life insurance pay out and when doesn’t it?

If something happens to you while your policy is active, your insurance pays an agreed amount to any dependents you leave behind. You decide the length of the contract. You may also wish to insure loved ones until the last installment for your house is paid. Or perhaps you want to cover your family until your child or children have finished their education and start making their own way in the world. In most cases, a contract runs for 10, 20 or 30 years.

There are also cases where the insurance does not pay. This is usually when:

• The cause of death is not fully determined
• The insured person was killed by a person entitled to benefits via the policy
• Incorrect information was provided during risk assessment

It’s a sensitive topic, but one that needs to be mentioned: In the case of intentional death, or suicide, there are limitations within some policies. For example, most insurers will not pay out if the suicide occurs within the first three years of the contract.

How do you get it?

By now, you’ve probably realised that life insurance is the sensible option. Our goal is to provide you with the best insurance cover that enables you to live your life without fear. That's why we try to give you all the information you need to make the right decisions.

Arrange a non-binding consultation with one of our advisors today to clear up any questions and discuss the next steps.