A critical analysis: Why the state does not protect you in case of fatality

The most important facts summarised for you

Pensions in Spain in the event of death are often not sufficient to cover the needs of the family. This is not just what we say, it is a reality. In this post we explain briefly what the state's protection consists of:

Widow's or widower's pension: to qualify, you must have paid Social Security contributions for at least 15 years. The pension will be 52% of the regulatory base, with the maximum possible pension being €905.76 per month.

For employed persons, the regulatory base is similar to earnings. However, the widow's/widower's pension is capped at €905.76 per month, which in many cases will leave the widow/widower in a situation of vulnerability.

Moreover, the self-employed pay contributions far below their income. We don't want to go through all the rules and regulations, but here are a few examples to illustrate the problem:

• A self-employed person with an income of around 2,000 per month generates a widow's pension entitlement of around €535 per month.
• A self-employed person with an income of € 4,000 per month is entitled to a widow's/widower's pension of only € 663 per month.

The widow's/widower's pension is also taxed as earned income, so that the surviving spouse's final income is still lower than the above-mentioned amounts.

Orphan's pension: The beneficiaries are the surviving children under the age of 18, or up to the age of 22 in case of incapacity for work or unemployment.

The pension is calculated at 20% of the regulatory base - if there are several children, the maximum is in any case 48% of the regulatory base.

As with the widow's/widower's pension, self-employed persons face a greater problem than employees - roughly speaking, the children of a self-employed person receive a widow's/widower's pension of approximately €250 per month (irrespective of the income the parent received

Conclusion:

Of course, the death of a loved one is a heavy emotional blow, but it can also have financial implications that compromise the family's quality of life. The latter can be protected by life insurance. Some common questions are the following:

• What does the price depend on? It depends on age, profession and the practice of risky sports. In any case, it is cheaper than you might expect.
• Do you already have insurance linked to your mortgage? Think that the bank only covers you for the mortgage part, usually not enough to cover your family's other needs.
• Do you have real estate assets and do you think your family is covered? Remember that in Spain, in order to inherit you have to pay inheritance tax, and for this you need to have capital. AXA's life insurance covers the direct payment of these taxes.
• And in the event of occupational disability and serious illness? Life insurance can be supplemented with cover to protect against other unforeseen events.

At Anke Sevenster we analyse your needs and design a plan according to your personal situation. Do not hesitate to contact us.