Accident Insurance Policies
Another way of guaranteeing the financial stability of your children is by taking out accident insurance.
This is insurance that cover various circumstances established in the policy, such as total and permanent incapacity or death. It also indemnifies the insured party if they are hospitalized after an accident. This way, the recovery period will not harm the family finances and you won't be overwhelmed by outgoings while you are unable to work (since your salary will be partly but not fully covered by Social Security).
Accident insurance is cheaper than life insurance.
BBVA Accident Insurance Coverage
BBVA Accident Insurance offers two main categories of coverage: for death and for hospitalization.
Death coverage is divided in three subcategories, which in turn offer different indemnities:
- Death of the policyholder as a result of accident: indemnifies beneficiaries named in the policy (can be children) with €25,000 if the death occurs with two years of the accident occurring.
- Death of the policyholder due to a road traffic accident (double capital): compensation is €45,000.
- Death of a spouse due to a road traffic accident (triple capital): compensation is €67,000 if the death is the result of the same road traffic accident in which the policyholder dies, and the death occurs within one year of the accident.
Coverage for hospitalization in the event of accident is €11.25 daily from day one for hospitalizations longer than 96 hours, up to 365 days after the day of admission.
Although a pension plan is a financial savings product intended to boost state retirement pension, it can also be used to guarantee the financial stability of your children. This is because a pension plan you can be redeemed in the following instances:
- Retirement of the pension holder.
- Long-term unemployment.
- Permanent or severe incapacity of the pension holder.
- Severe illness of the pension holder or their direct dependent.
- Death of the pension holder.
It is most notably in this last instance, of death of the pension holder, where it is most useful to secure the financial future of the children. In the event of death, the pension plan beneficiaries are those appointed by the pension holder. If no-one is allocated, they will be the legal heirs, namely the spouse and children. Nevertheless, when taking out a pension plan it is advisable to include your children as beneficiaries in the event of your death, as way of ensuring that they receive the money.
Moreover, pension contributions are tax-deductible.