Life insurance: interest insurance: annuity and inheritance annuity

There are different types of life insurance. This article is about interest insurance. There are two types: annuity insurance and inheritance insurance. An annuity is an insurance policy that pays out if the insured person is alive at the end date. The benefit stops after a certain period or upon death. An annuity can also be taken out so that a payment is made to the beneficiary in the event of the death of the insured person. Interest insurance pays out periodically. This could be every three months, but also every year. The premium payment can be made periodically, but can also be paid with a purchase price . Under certain conditions, the premium is deductible from income for income tax purposes.

Annuity insurance

An annuity insurance is a form of interest insurance. Annuities are often used to supplement retirement income.

Life annuities

There are two types of annuities:

  • Annuity on one life: death benefit is for the benefit of another
  • Annuity on two lives: payment upon life and/or death

An annuity pays out periodically to a specific person. If the person dies, there is no longer any right to benefits. If the insured person dies before the benefit period starts, the right to benefits also lapses. An annuity can commence immediately or be deferred . An immediate annuity can only be taken out for the purchase price.

Inheritance insurance

In addition to the annuity, you also have inheritance insurance. An inheritance insurance policy is an interest insurance policy that pays out periodically to the beneficiary as soon as the insured person dies. This insurance covers the risk of death. The periodic payment continues until the end date, while payment of the premium is due until the end date of payment or until the death of the insured.

Example: A man takes out an inheritance insurance policy at the age of 30 with the agreement that if he dies before the age of 65, the payment will be made to the beneficiary. He pays his premium every year, but dies at the age of 50. The beneficiary will then receive insurance benefits for another fifteen years. If the man dies at the age of 35, the insurance would have to pay out to the beneficiary for 30 years.

Inheritance annuities are also often part of a pension provision.