Life and death insurance: how to distinguish them?

Verified 25 September 2026 - Public Service / (Prime Minister)

The life insurance contract and the death insurance contract do not have the same nature and have different objectives. However, all 2 of them may result in the payment of a sum to designated beneficiaries.

In the two contracts, three persons may be distinct:

  • The subscriber, who signs the contract and pays the premiums
  • The insured, whose death triggers the payment
  • The beneficiary or beneficiaries, who receive the capital or the annuity.

Most often, the subscriber is also the insured.

THElife insurance is a savings product that allows the subscriber gradually build up capital. The applicable taxation also makes it a transmission tool to prepare his succession.

The subscriber may make a one-time payment or periodic payments (called bonuses) according to its savings capacity. The funds paid out are invested in financial support (in euros or units of account) which can generate income (interest) and increase capital.

After the death of the insured, the capital plus any interest will be transferred to the beneficiaries which he shall have designated.

In most life insurance contracts, the policyholder can also benefit from the savings made. It may recover all or part of the capital in case of need: either on the expiry date provided for in the contract, or early by making " redemptions ».

THEdeath insurance is a pension contract to protect your loved ones in the event of death. It does not allow savings to be made.

In return for bonuses paid by the subscriberand after the death of the insured, the designated beneficiaries will receive a fixed amount of capital. The objective is to enable them to meet current expenses following death: rent, tuition fees... The level of premiums paid depends on the level of the guaranteed capital.

At the conclusion of the contract, the insurer undertakes to pay a fixed capital if the death occurs (for example a capital corresponding to 2 years of wages). But if you are still alive at the end of the guaranteed period, no capital is paid and the premiums paid remain vested in the insurer.

FYI  

We must also distinguish death insurance from funeral insurance. THEfuneral insurance shall be limited to the assumption of the costs and expenses of the funeral.

Example :

You are a couple and you have a 12-year-old child in college.

As a precaution, you decide to subscribe:

  • One life insurance contract : with a monthly payment of €50 to set aside money to fund your child's education later.
  • One death insurance contract : with a monthly payment of €10 to ensure the payment of a fixed capital of €30,000 to your spouse in case of premature death.

If you die 2 years after taking out these contracts, your spouse you have designated as beneficiary of the 2 contracts will receive:

  • The capital built up on the life insurance contract, i.e. approximately €1,200 (all monthly payments paid for 2 years, less the costs charged by the insurer and plus any interest, etc.)
  • The capital provided for in the death insurance contract in the amount of €30,000.

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