A life insurance policy is a good investment, especially if you have family.
It provides your surviving relatives with a financial safety net in the event of your death.
With a life insurance policy, your relatives are financially insured if you fall away.
In the event of your death, your relatives will receive a payment so that they avoid financial worries in the midst of grief. It is the “beneficiaries” who will be able to receive a sum or an ongoing benefit in the event of your death.
For example, a life insurance policy can be the reason why your family can stay living in your home, even if they now only have one income.
A life insurance policy is often taken out in connection with pension savings.
If you are alone, you can choose to simply save up for retirement and choose a cover in case of disability that would make you unable to work.
Always remember to check which insurances you may already have through any work or pension savings to avoid being double-insured (and thus paying too much).
What does a life insurance cover?
You can choose to take out a life insurance policy to create a financial safety net for your relatives in the event of your death.
In general, this applies to life insurance:
- The insurance can be taken out when you are between 18 and 49 years old
- The insurance is valid until you turn 75 years old.
- An amount is paid regardless of whether the death is due to illness or accident.
You choose who should have the money and how much money they should have. The recipient is called the “beneficiary” or beneficiaries.
You must also decide whether the payment should be made as a lump sum or a fixed monthly payment.
If you create the life insurance without deduction, do not take into account taxation.
Without deductions, your survivors do not have to pay tax on payment.
If, on the other hand, you choose to set up your life insurance with a tax deduction, then income tax must be paid upon payment.
All this you agree with your insurance company when you create the insurance.
Do I already have life insurance?
A life insurance policy is often taken out through a pension company, a trade union or the workplace. It may well be that you therefore already have a life insurance policy. You can find more information on pensionsinfo.dk and see if you may already have life insurance.
Price: What does a life insurance typically cost?
The price of a life insurance policy depends on your circumstances as a policyholder.
The price is calculated based on the probability of the policyholder’s death. This probability is calculated by the insurer of the insurance company.
On the basis of thorough statistics, the price of your life insurance therefore depends, among other things, on the policyholder’s age, level of education and health situation.
In addition, your price depends on how high an insurance sum you want.
The price of a life insurance policy, like other insurance policies, depends on what it is to cover.
The most important factors are:
- The insurance premium
A life insurance with an insurance premium of DKK 2 million will of course be more expensive than one with an insurance premium of DKK 1 million.
It is therefore important to clarify what your family needs financially in the event of death, illness or accident, so that you are neither under- nor over-insured.
- Your age
Insurance is about risk, and the older you are, the more likely you are to need your life insurance. This means that the price will be higher the older you are.
- Your weight
Weight is a good indicator of your lifestyle and your overall health. Obesity can be associated with greater risks of life-threatening diseases. Some insurance companies will inquire into your weight, and increase the price if you are overweight.
- Your lifestyle
Excessive alcohol consumption, smoking, too little sleep or lack of exercise affect our health and create greater risks. Your lifestyle therefore also has an impact on the price of your life insurance, as an unhealthy lifestyle increases the likelihood that you will need the insurance.
Lifestyle, however, as opposed to age, can change. This means that a change in lifestyle can reduce the cost of your life insurance and reduce your risk of getting lifestyle diseases.
However, it is not only your health insurance companies are looking at when calculating the price of your life insurance. Risky hobbies such as climbing, paragliding, diving and the like will also increase the cost of your life insurance.
- Your job
Your job also affects the price, as your life insurance will be more expensive if you work in high-risk environments such as underwater, in tunnels or on tall buildings.
- Your medical history
With many insurance companies, a medical assessment is a prerequisite for being able to take out life insurance, as your state of health has an effect on the price.
However, the use of medical assessments is regulated by legislation and agreements to protect consumers. Depending on your medical examination, your insurance company may choose to increase your premium or exclude claims regarding certain conditions.
The insurance company may also ask for information from the doctor, and in rare cases from the hospital. However, the insurance company must obtain your written consent before they can do so.
Who gets life insurance paid out? Who is the beneficiary?
The beneficiary or beneficiaries of a life insurance policy are the persons to whom the life insurance policy accrues in the event of the policyholder’s death.
In principle, the life insurance is paid to the “next of kin”. A spouse or registered partner is considered the next of kin. If you have been living together under “marital conditions” for at least 2 years, and have or are expecting a child, you are also considered a next of kin. However, one must share address at time of death.
If you do not have a partner, or someone who lives up to the requirements for this, then the life insurance will go to children, grandchildren or great-grandchildren (so-called life heirs).
If you do not have a partner, heirs, or others mentioned in your will, or if there is no will, the next of kin will be found under the Inheritance Act.
Please also note that the rules for next of kin were changed on 1 January 2008. This means that “the rules on cohabitation in marriage-like relationships do not apply”.
Insertion of another beneficiary on life insurance
Usually, the life insurance goes to the next of kin. If you want your life insurance to go to another person, you must therefore actively take a position on this. In most cases, you just need to contact your insurance company and they can help you get the person (the “beneficiary”) to whom you want the life insurance to go.
You can also deposit ” no beneficiary “, whereby the money is paid to the estate and paid out according to the Inheritance Act or the will.
Insurance in the event of death
It is possible to secure his loved ones in case you pass away. This can be done in different ways, and it can be a good idea to consult with experts before taking out insurance, both so that you do not pay for double insurance and so that you are properly insured.
If payment has been made to ATP for a minimum of 2 years after 2002, APT will pay a lump sum.
In addition, life insurance or cross-life insurance can take effect in the event of a death.
Can you take out life insurance if you are over 50 years old?
It is rare that it is possible to take out a life insurance policy when you are over 50 years old.
The general attitude among insurance companies is that a life insurance policy can be taken out when you are between 18 and 49 years old.
Can you take out life insurance if you are over 60 years old?
Again, it can be difficult to find an insurance company that will take out life insurance on you if you are over 60 years old.
A life insurance policy must be taken out when you are between 18 and 49 years old.
Is there an age limit for a life insurance policy?
Overall, life insurance can be taken out when you are between 18 and 49 years old, and the insurance is valid until you turn 75 years old.
How is a life insurance paid out?
When you buy a life insurance, you can choose whether the payment should be made as a lump sum or a current payment.
The price of your life insurance reflects the size of the payout.
It is advisable to talk to a pension adviser about your and your family’s need to determine what is the right payout in your situation.
Best life insurance
As with all other types of insurance products, there is no one life insurance that is the best, as you have to choose insurance based on your needs and requirements. Especially for single people without children, it may be a better idea to save a little more up for retirement, as there are no survivors to look after in the event of death. On the other hand, a slightly larger pension might be a better idea.
If, on the other hand, you have a spouse and / or children, a life insurance policy can be a good idea. A good first step can be to visit pensionsinfo.dk, to see how you are covered today and who is the beneficiary. Then you can see if this covers your needs, or if you want to investigate the market further. It is always a good idea to obtain several quotes from different insurance companies, in order to be able to compare price and coverage. Often you can also get good guidance in your pension company or in your union.
Cruise insurance, what is it?
A cross-life insurance is a special life insurance, but has the same purpose as a life insurance – namely to protect the one you have closest in case you pass away. Most often, both cohabitants take out insurance on each other (ie on “cross”), hence the name “cross-life insurance”.
The special thing about a cross-life insurance is that you can avoid paying property tax. You can do this because the policyholder and the insured in this insurance are two different people.
With a cross-life insurance, you can avoid paying for cohabitants’ children, even though they are legally heirs to the estate.
Another advantage of a cross-life insurance is that any creditors cannot access the sum insured, even if the deceased leaves debt.
A cross-life insurance can be a good idea if, for example, you own a home together without being married. Since you take out insurance on each other’s life with a cross-life insurance policy, you are insured if one dies. This is not part of the inheritance and is tax free.
Lawyer Jesper Hjetting gives this example of a cross-life insurance:
Cross-life insurance, an agreement whereby unrelated or distantly related persons, e.g. undocumented cohabitants, can insure each other financially on death. With B’s acceptance, A as the policyholder takes out endowment insurance on B’s life. A is the owner of the insurance and B is the insured. If B dies during the insurance period, A will be paid the sum insured. As it is a payment on A’s insurance, A does not have to pay property tax (the previous inheritance tax). Most often, both parties establish such insurance on each other’s lives, hence the name cross-life insurance.
How much does a cross life insurance cost?
As with all insurance products, there is no single fixed price. On the other hand, it is a good idea to map out your needs and then contact different insurance companies to be able to compare prices. The price depends on various factors, for example, a cross-life insurance will be more expensive if one party suffers from a chronic illness, and in some cases the insurers will not take out cross-life insurance at all in case of chronic illness.
The price will also depend on how much you want to be insured for.
Cheap Cross-Life Insurance
Unfortunately, there is not a single insurance company we can designate as the cheapest, as the price of a cross-life insurance depends on your and your partner’s circumstances, such as medical history and how much you want to be insured for.
On the other hand, it is a good idea to get quotes from different insurance companies before you take out new insurance, as there can be a lot of money to be saved.