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Life & Accident Insurance

Life Insurance

There are three levels of life insurance:

Level One:  Bituach Leumi:  Click here to see the full terms of coverage from bituach leumi in the event of a death.

Level Two: Pension:  You can set up your pension to include life insurance of up to 100% of your final salary.  See this post on the insurance in your pension for more details.

Level Three:  Private Life Insurance:  For those who need additional coverage extra life insurance can be purchased, either as a lump sum or as a series of payments.  Variants of this include life insurance to pay off a debt (for your mortgage) and life insurance with special terms for people with serious health problems.

As a general rule, life insurance should replace the economic contribution of the insured to the household.  Note that this is not the same as the financial contribution:  A wife who works part time may only bring in NIS 2,000 a month, but her doing the housework would have to be replaced were she to die and that would need additional coverage.  In fact, due to the coverage from the pension, it is usually those who do not bring home money who need the coverage, not the other way around.

Accident Insurance (Teunot Ishiyot):

Accident insurance, also called teunot ishiyot, offers the insured a sum of money in the case of an accident.  While the money can be used for anything, the money should be enough to allow a person to adjust his or her life in the case of a sudden accident or illness.  For example, if a person is considering accident insurance to cover the 90 days until his disability insurance kicks in, he may want to first check how many sicks days he or she has accrued (Israeli law makes it so that people accrue them, but rarely use them) and then choose a policy to cover his loss for the remaining days.  There is no golden rule here, but the trick is to play out the disaster financially and choose a necessary amount to insure.

There are five types of accident insurance:  K1: a certain amount of money for death from an accident (from an accident means within 12 months).  K2 allows for the sum in case of disability as well.  K3 gives a weekly amount for disability for up to 2 years.  K4 expands accident to include a particular list of sicknesses (ie cancer).  K5 expands the list to include all illnesses unless stated otherwise (ie all illnesses except Lou Gherig’s Disease.)  

The policies don’t call is K1, K2 etc, but those are the building blocks that make up the policy and by using those terms to break down the policy in front of you, you can better understand that you have or what you are being offered.

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