In addition to the public pay after retirement or pension plans, there are other possibilities for when you retire: discover savings insurance.
With the ‘piggy bank of the pensions’ under minimums and the public retirement pay in question, more than one considers seeking other ways that guarantee a certain tranquility after the professional retirement. In that sense, pension plans usually appear on the horizon as a recurring option to complement what the public system offers.
However, it is not the only possibility, much less, that the private sector offers, since there are alternative formulas that can help you live better from retirement until it is time to take the last step. One of them, which also has certain advantages over pension plans, is savings insurance.
From the outset, you should be clear that savings insurance is not necessarily linked to retirement, as if pension plans are found (the most common assumption to rescue them is precisely retirement, even if it is not the only one). In essence, these savings products do not differ much from insurance to use, only instead of covering a contingency (as do life or automobile policies, for example) they refer to a specific date previously agreed between the beneficiary and the company In this way, the second acquires the commitment to pay the first a certain amount – which adds the capital and the agreed interest – in the event that the insured is still alive.
Coverage in case of death
What happens if this is not the case and the insured has the misfortune to die? Well then there is an exception to cover a contingency, since one of the significant and differentiating points of these types of policies is that, in addition to a savings vehicle, they have an ad hoc coverage if the insured’s death occurs.
How savings insurance works
As with other insurances, the contractor must contribute capital periodically , usually every month, every quarter, every semester or at the end of the year. However, exceptionally, there are some savings insurance open to the contribution being only one, which is entered at the beginning of the contractual relationship.
Advantages of savings insurance compared to pension plans
In addition to the aforementioned coverage in case of death -which the pension plans do not offer-, savings insurance does guarantee a return on expiration date , while the other products do not. That performance will be based, of course, on the interest rate signed between the insurer and the contractor in advance.
Savings insurance vs. deposits
Although both bank deposits and savings insurance offer a certain yield agreed upon at an expiration date, periodic interest payments do not occur in savings insurance. However, on the positive side it is that the interest rates that apply to the latter tend to be more interesting than those carried by the former.