Like umbrellas, life insurance is needed at the time of disturbing, but not considered when conditions are still safe. Yet as is known, life is full of risks.
We can never predict when that risk strikes us and the family. If you are aware of this risk and the importance of protecting your family through life insurance, that's great!
According to data from the Financial Services Authority Indonesian country, the life insurance penetration rate in 2014 increased compared to 2013. That is, the more people who become participants of life insurance.
But there is another problem when there is awareness to follow life insurance. The question arises: what is the right life insurance like?
Kinds of Life Insurance In general, there are four types of life insurance offered by insurance companies, namely:
1. Term Insurance (Term Life)
This insurance usually offers a 5, 10, or 20 year contract. During the contract period, the paid premium is fixed and cheap. But if you want to extend the contract period, the premium goes up.
Premiums will be forfeited once the contract is completed, so the sum assured money is offered to attract the public. This type of insurance is very popular, but it is rarely offered by insurance agents because most insurance companies now tend to focus on unit-linked.
The recommended choose this insurance are those who prioritize the future of children above all.
2. Life Insurance (Whole Life)
This insurance provides lifetime protection, but insurance companies usually only limit up to 100 years. Whole Life insurance premium is higher than Term Life, but it will not be forfeited if there is no claim.
In addition, when the contract expires, the sum insured will be given entirely. This insurance is recommended for those who do not have dependents and do not want to inconvenience the family finances when died.
3. Dwiguna Insurance (Endowment)
This insurance is called dual purpose or has two benefits because it gives the sum insured when the insured dies within a certain period. In addition, the insured can withdraw the money when the insured is alive when the contract expires.
- This insurance is like combining the benefits of Term Life and Whole Life, so the premium is more expensive. This insurance is recommended for those who want to: More to ensure children's education
- Have funds for unexpected needs in the future
- Have a bigger pension fund
4. Unit Link Insurance
Unit Link life insurance is most often offered by insurance agents. This product combines insurance and investment benefits. People who use this insurance are usually interested in investing but can not or afraid to go out on their own while still making sure his life is protected.
If you use unit link, understand correctly about the money insurance coverage so as not to misunderstand the claim. But if it is looking for a large investment results, better not rely on unit link. Because the return is less significant when compared with pure investment, such as mutual funds or stocks.
The Right Life Insurance
To choose the right type of life insurance for us as a family, be sure to look at each of these insurance benefits to suit your needs. In addition, it is also important to see the financial ability to pay premiums.
For example we take the example case of Agus aged 30 years with a salary of Rp 8 million per month.
Purpose of insurance:
- Protect the future of his wife and one child
- Have sufficient retirement fund.
- He did not need health insurance because he and his family had covered a decent office insurance.
Family financial condition Mr Agus:
- Already have a house with installments Rp 2 million to 10 years into the future
- No other installments
With a salary of Rp 8 million and is assumed to increase 5 percent per year, Mr. Agus's financial condition can be quite good.
Looking at the financial condition and needs, Mr. Agus chose the type of dual-purpose insurance. He signed a 25-year insurance contract with a sum assured of Rp 500 million.
That way, if he for example dies 20 years later, his family will get Rp 500 million.
Meanwhile, if he is still alive when his contract expires, his family will also receive Rp 500 million.
For information, buying an insurance policy only because interested in hearing the offer of an agent without knowing the details further is not recommended. Because the wrong choice of insurance is the stakes financial condition can be messy. So, carefully and understand the insurance product before choosing it.