4 Types of Life Insurance
Life insurance is a guarantee that aims to take one's risk of unexpected financial losses. Life insurance often sounds scary, because the connection is always not far from death. Though besides that, actually life insurance is also beneficial for a family if the person who provides it is no longer able to work because of health problems or permanent disability.
As the head of the family, this risk should be the main consideration. Insurance is like an effort to "provide umbrellas before the rain", which does not yet feel the benefits, but in the future.
In life insurance, there are four product categories divided based on the needs of each prospective customer. Check out the more complete review below, which is reported from CekAja page:
1. Term Life Insurance
As the name implies, this type of life insurance provides protection to policyholders in a certain period of time. The coverage system used has a validity period. The length of time set here starts from 5 years, 10 years or 20 years, according to the offer given by the insurance company.
Because there is a contract period that is no longer valid after maturity, term life insurance is the most affordable. The premium cost is only 25 USD per month.
Even though it is cheap, the coverage that is obtained is not to be doubted, there is still a lot that can even reach billions of rupiah. The drawback, the premium that has been paid can be forfeited if there are no claims as long as the insurance policy is still valid.
2. Lifetime Life Insurance (Whole Life Insurance)
Unlike term life insurance that has a validity period, Whole Life Insurance provides protection to policyholders for life. The whole life in question is 99 years or 100 years.
Why is that number said for life? According to the Central Bureau of Statistics, the average life expectancy of the Indonesian population is 70 years. Lifetime Life Insurance will return the total premium that has been paid at interest of 4 percent per year.
When calculated, this amount is not much especially with the tax deduction. But the benefits, insurance premiums will not expire when there is no claim, so that it can be taken as a whole if the contract period ends. To get all these advantages, of course there is a price that must be paid more, namely a premium that is much higher than term life insurance.
3. Endowment Insurance
Furthermore, there is dual purpose life insurance. This life insurance offers 2 benefits. In other words, there are collaborative benefits between term insurance and savings for children's education and pension funds.
Not a few parents are interested in insurance to be able to prepare school fees for children or guarantee their survival even though you are retired later. Another thing that is profitable and different from term life insurance is the life benefits obtained by policyholders.
If you as an insured are still alive when the policy is due, the insurance will be provided by the insurance company. The validity period varies, ranging from 10 years to a certain age, for example 60 years.
4. Unit Linked Insurance
Finally, unit link life insurance which is arguably the belle of its own industry. Combining investment with life insurance and health insurance, this type of insurance is perfect for those of you who are interested in investing and want to keep getting life and health protection.
Investment in unit link insurance is driven by insurance companies so that policyholders only sit and get reports every month about the value of their investment. However, your investment profits or losses remain borne by you.
The portion of premium in general, 20 percent for investment and the remaining 80 percent is intended for guarantee of customer life insurance. Unfortunately, the results of new investments can be enjoyed in the fifth year because there is no premium to be paid again.
The level of awareness to own this product may still be low in Indonesia. In contrast to developed countries such as in Japan, where almost all of the population, especially those of productive age, already have a life insurance policy.
