How to choose the amount of the capital, that is to say the sum to be insured? The choice of capital amount is closely linked to the specific need you have with a life insurance policy.
For example, with term life insurance, you can protect yourself against a debt contracted (such as a home loan or business loan). In such cases,
the amount to be insured will be equal to the amount borrowed, and the most practical choice for the insured is to opt for a decreasing lump sum, ie which decreases as the debt is repaid. Thus, in the event of the death of the insured (or the occurrence of other events covered by the policy), the family of the insured (or other beneficiaries) will be able to benefit from the capital necessary to repay the debt, thus retaining home ownership in the specific example of the mortgage loan.
The death insurance policy also serve to protect the standard of living of the family in the absence of the main income. In this case, the sum to be insured must be chosen on the basis of the net annual income of the insured, multiplied by a number of years which ideally corresponds to the time necessary for the family to become independent.
For example, if your annual income is CHF 80:
CHF 80 revenue x 000 years = CHF400.
By choosing a lump sum of CHF 400, you guarantee your family the maintenance of the same standard of living as at present for 000 years. In fgeneral,
good coverage can last 5-10 years, with longer periods if there are very young children in the household.
In the latter case, you must opt for a constant capital policy.