What to do when you get a raise?
A good portion of the population has a primary reflex of spending everything they earn. Don’t get the wrong idea, this is a harmful reflex.
The best solution is therefore to save.
But what are the savings solutions that are available? This depends on the country you live in and your income. The taking into account of the tax system is also important. Some countries like France tax-exempt certain investments to direct investment toward them.
Focus on life insurance
Life insurance is a contract between an insurance policy holder and an insurer or insurer, where the insurer agrees to pay a named beneficiary a sum of money upon the death of an insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policyholder usually pays a premium, either regularly or as a lump sum. Benefits may include other expenses, such as funeral expenses.
Limit of a life insurance contract
Life insurance policies are legal contracts and the terms of each contract describe the limits of the insured events. Often, specific exclusions written into the contract limit the liability of the insurer; common examples include claims relating to suicide, fraud, war, riot and civil unrest. Difficulties can arise when an event is not clearly defined, for example: the insured knowingly took a risk by consenting to an experimental medical procedure or by taking medication resulting in injury or death.
Life insurance as an investment
Modern life insurance has some similarities to the asset management industry, and life insurers have diversified their product offering into retirement products such as annuities.
Lifetime contracts tend to fall into two broad categories:
Protection policies: designed to provide a benefit, usually a lump sum payment, in the event of a specified event. A common form — more common in recent years — of a protection policy design is term insurance.
Investment Policies: The main objective of these policies is to facilitate capital growth through regular or one-time bonuses. Common forms (in the United States) are whole life, universal life and variable life policies.
