Insurance, and who gets paid
Insurance protects against losses you could not afford. Many policies sold as investments are something else, and it helps to know who is paid.
What it is for
Insurance is worth it for losses that would wreck your plans: being sued, a serious illness, your family losing your income. Small losses you can pay yourself are usually cheaper to carry than to insure.
Protection or investment
Term life insurance pays only if you die during the term, and is cheap for that reason. Investment policies mix a fund with some cover. Their KID shows the total yearly cost; compare it with a plain fund.
Who is paid
Many sellers are paid by commission from the product they sell. EU rules make them tell you, but it is easy to miss. Ask plainly: how are you paid for this, and how much over the years?
Before you sign
Read the KID, the cost of leaving early, and what is and is not covered. A policy that is hard to leave for ten years should be very good to deserve it.
Key takeaways
- Insure what you could not afford to lose.
- Investment policies: read the total yearly cost in the KID.
- Always ask how the seller is paid.