Líftrygging

Líftrygging is the Icelandic term for life insurance. It is a contract between an insurance policyholder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person. This payment, known as a death benefit, can help provide financial security for the deceased's family or other beneficiaries.

There are generally two main types of líftrygging: term life insurance and permanent life insurance. Term life insurance provides coverage for a specified period, such as 10, 20, or 30 years. If the insured person dies within the term, the death benefit is paid. Permanent life insurance, on the other hand, provides coverage for the insured's entire life, as long as premiums are paid. It often includes a cash value component that grows over time and can be borrowed against or withdrawn.

The purpose of líftrygging is to protect against financial hardship that may arise from the death of a primary earner or a key individual. It can be used to cover expenses such as funeral costs, outstanding debts, mortgage payments, or to provide ongoing financial support for dependents, like children's education or a surviving spouse's living expenses. The cost of líftrygging varies depending on factors such as the insured's age, health, lifestyle, and the type and amount of coverage.