On this occasion, I will discuss life insurance. Do you already know what life insurance is?
Life insurance is a contract agreement between you as a policyholder or an insured with an insurance company as an insurer where the insurance company will pay a nominal amount of money if there is a risk of death against the parties Insurance policyholders.
You as the insured shall pay a premium which will be beneficial to provide reimbursement for the risk of your death.
In other words, life insurance is a type of insurance that aims to bear people against unexpected financial losses, caused by the insured passed away.
As with the ownership of health insurance, this life insurance can be purchased for self-interest and on behalf of the insured alone or purchased for the benefit of a third person. For example, a husband can buy life insurance with his wife as the insured, or the parents can also buy life insurance with his child as the insured.
There are several types of life insurance, but before discussing these types of life insurance, it's a good idea to know in advance some of the reasons why life insurance is so important to you.
Why need to buy life insurance?
Top reasons why it should have life insurance
1. As protection against loss of income for families
No one knows what will happen tomorrow, including you. In anticipation of your chances of getting hit and leaving the family you are passionate about forever, you need to buy a life insurance policy so that your family can get the sum insured for life after you leave.
2. As a protection for death risk due to diseases of the major causes of mortality
Based on a survey conducted by the World Health Organization (WHO) in 2002, the 10 main causes of death in Indonesia are coronary heart disease, tuberculosis, vascular abnormalities, respiratory diseases, newborn diseases, lung disease, Traffic accidents, diabetes, high blood, and diarrhea.
These diseases are quite common, so it is important that you have the protection of the risks infected with the disease and died.
3. One way to save or prepare for retirement
Saving on life insurance is the best alternative choice for your long term needs due to the nature of regular premium payments, mandatory, and not easily taken at any time.
Types of life insurance
Types of life insurance you need to know
There are several types of life insurance products which of course each have different benefits. These types of life insurance aim to serve a wide range of needs, capabilities, and purchasing power of society. Please listen to any of the following types of life insurance:
1. Term Life Insurance
Term life insurance is the function to provide protection to the insured within a certain period of time. This life insurance usually offers a contract for 5, 10, or 20 years, with fixed and calculated premiums.
You are recommended to choose this type of life insurance if you prioritize the future of your family especially the child's education. Suitable for those of you who have a need for large insurance costs but have limited financial capabilities.
If you choose this life insurance, some of the benefits are:
You as a policyholder gain freedom in determining the amount of premium according to your ability.
Sum insured that you can earn as a policyholder can reach the number of billions rupiah. That is, if the insured dies when the contract is still active, then the insured family will get substantial coverage money.
Meanwhile, the disadvantages of this type of life insurance are:
The insured can lose the premium money that has been paid or the premium is forfeited once the contract is completed if not experiencing health problems or death until the completion of the contract.
2. Whole Life Insurance
Life insurance type Lifetime or whole life insurance provides lifetime protection, although usually, insurance companies limit the benefits of protection up to only 100 years.
This life insurance is recommended for those of you who have no dependents and want more benefits than just death, or you are interested in the idea of long term savings.
So, if you want the protection of life, as well as savings for emergency needs e.g., pay a hospital bill fee, you may consider buying this type of life insurance policy.
The advantages of this type of life insurance are:
Policyholders are possible to obtain the cash value of the premiums paid.
If you are not able to pay the premium installment periodically, you can use the cash value of the premiums paid to pay the next premium.
The insurance premiums that you have paid will not expire if there is no claim.
When the contract expires, the sum insured will be given entirely.
Meanwhile, the drawback is:
The premiums are bigger than the term life insurance premium, and can even reach more than twice the fold. The reason of this high premium is because the figure of life expectancy of Indonesian people only 65 years for men and 70 years for women, so the possibility of insurance claims before the period of protection ends higher.
The cash value of the total premiums paid is not too large because the interest in this insurance is usually only 4% per year, and this number has not been tax deducted.
3. Endowment Insurance
This type of dual life insurance or endowment insurance as the name implies is an insurance that has two benefits, namely as a life insurance futures and savings.
This means that you as a policyholder can obtain a cash value from the insurance premiums that you have paid in the form of sum insured if the insured dies in a certain period in accordance with the policy of the relevant insurance policies and can also The insurance policy within a certain period of time before the contract expires.
This type of life insurance is recommended for those who prefer to ensure the availability of education funds for children, want to have funds for the unexpected needs in the future, and want to have a bigger pension fund.
The advantages of this type of life insurance are:
As explained above, you can claim this life insurance policy before the expiry of the contract, for example for your child's education fund. However, this withdrawal can only be done once in a period of several years according to the agreement that has been made.
If for example, you as the insured is still alive when the term expires, you will get all coverage money.
Meanwhile, the drawback is:
Because this type of life insurance has two benefits, which like combining the benefits of life futures insurance with life insurance for life, so it is very large enough, can reach millions of rupiah per month.
4. Unit Life Insurance Link
This type of link unit life insurance combines the benefits of insurance with investment and is most often offered by insurance agents. If you are interested in investing but do not understand the investment and want to keep your soul still getting protection from death, you can choose this type of life insurance.
The advantages of this type of life insurance are:
You as a policyholder not only get guaranteed protection but also investment returns with high enough interest annually.
While the disadvantages are:
The return on investment is less significant compared to pure investments such as stocks, money markets, or mutual funds. If you are looking for a great advantage of investing, you should not rely on unit link life insurance.
The sum insured that will be obtained is low, especially if the investment fails or only generates a small profit.
Wondering how to find the best and cheapest health insurance? Look at the solution!
Research before buying
You should remember that before you buy a life insurance policy, you are advised to find as many information as possible and compare the offers of some insurance companies related to the protection offered and the magnitude of the premium You have to pay and adapt to your ability.
Choose a life insurance or health insurance company from reputable private insurance companies such as Prudential, BNI Life, AIA, Cigna, Allianz, or Sinarmas.
Also, consider the number of your dependents and the needs of any funds that will arise in the future in choosing this type of life insurance. The point is that you need to do careful planning according to the needs before choosing the life insurance product that you will buy so that the protection benefits you get from the insurance product is optimal. Remember, the meticulous principle before buying also applies to life insurance products so you don't feel harmed.
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