Life insurance functions as a protection if Insured dies. For example, if I is an Insured's life insurance products and die tomorrow, then the insurance company will guarantee to give money to people that I leave.
Goal is to take life insurance to cover the potential loss of income. If I as the backbone of the family dies, the family that I will lose a source of income. If I follow the life insurance program, the family that I will get the insurance money that can be used as a substitute for the income lost, at least temporarily.
Actual convention choose life insurance product is not much different from choosing another product:
* No purchase insurance if not required, and
* If you need life insurance, buy life insurance that provides adequate protection.
From a brief survey to some of my friends and family members, could not have spelled out one of them who take the life insurance in accordance with the rules above. Most people buy life insurance when not needed, and does not take the insurance with the insurance money is sufficient if necessary.
Do not buy life insurance if not required
Main factors is to buy life insurance and indemnity obligations (eg debt). If someone does not have both then that does not need life insurance.
Children (or even a new born baby) do not need life insurance protection because it does not yet have insurance. If the child dies, the family will grieve, but will not be a bad effect on the financial condition of the family. Instead, the family finances, there would be significantly reduced because the amount of surety. Buy child life insurance at this stage will only be free to give money to the insurance company.
People who already have money can not require life insurance if they do not have a dependent and has no obligation. People without insurance and have no obligation to a third party does not need life insurance protection because if they die, does not feel that there is loss of earnings.
If the person taking on the credit-consumer-credit especially now that they have obligations. Thus, it's time to take the life insurance (if credit is not equipped with credit insurance). If not, he has the potential to worsen-consanguineous relatives if something bad happen.
Parents of all children are independent and no longer have an obligation to the other party also does not need life insurance. If they die, their children will be sorrow, but it will not have that feel disadvantaged financially. In addition, if parents are to manage the funds properly, then they should have had a savings or investment returns that value is far greater than money guaranty insurance.
If parents already have enough savings, he can cancel the insurance before the time when life felt guaranty insurance value is not comparable with the number of saving. If he dies before the children independence, their children will still be in the form of inheritance to get these savings.
If you do not already have insurance and no longer in productive age, which required the elderly is not insurance, but the funds in the amount of liquid. Furthermore, in conditions like this needed a product that really is the opposite of life insurance, namely anuitas. If life insurance provides protection if the Insured dies too quickly, anuitas work to provide protection if the Insured live too long. Pay premiums on life insurance at this time could be the 'financial disaster' for the required product, which is exactly opposite of life insurance.
Buy life insurance with a guarantee that sufficient money
Needs the amount of insurance life insurance for each person is different, depending on the amount of insurance and liability. Basically, insurance money should be sufficient to pay debt-debt in full, meet the education costs of children Insured up to self, and to maintain the lifestyle that the family left behind, at least for some time.
Errors most consumers life insurance trust is simply a proposal of insurance agents who offer a product that usually does not match the value not sufficient. Based on my observations, people rarely have the level of middle of the city's economy is taking a big life insurance with the insurance value above Rp 100 million. While income per year may be more than just that.
There are families with two children with KPR debt worth hundreds of millions of rupiah, but taking a life insurance value is only Rp 30 million. In this case, the insurance will not be enough to help if things happen that are not desired in the family. To redeem debt house is not enough, let alone the cost of education for children up alone.
Choosing the right insurance products
As can be suspected, insurance products are not the most appropriate unit link insurance or other investment that has value. With link units, customers get the protection for life even though almost everyone of course does not need life insurance protection throughout his life. On the unit link, the customer must still pay the premiums on life insurance even when they do not need it at all.
The second is the same as the reason for any posts on my previous. Administrative costs and commission agents in the link unit is too large. In the first years following the link unit, practical client funds to pay out only a commission agent. In addition, there are administrative costs that do not lose the large, prospective customers and generally does not realize it at the time of the first unit link insurance.
So life insurance product which is right? Product is the right term life insurance. Term life insurance is pure insurance products without supplement investment. If the Insured dies during the guarantee, then the left will get the insurance money. If the Insured is alive at the end of the guarantee, the premium money will not be back.
The characteristics of term life insurance is as follows:
* There is no element of investment or for the results (except perhaps in the syariah insurance)
* The guarantee period is relatively short and not a lifetime. Usually sold in 1, 3, 5 or 10 years.
* At the end of the guarantee, customers have the option to extend the contract with the large premium increases in accordance with the provisions contained in the policy.
* The price premium is relatively inexpensive. Market at this time for about 30 years age and not smoking is about Rp 300 thousand / year for the insurance money Rp 100 million.
* Almost never offered insurance agent because the commission they get much smaller than if they sell the unit link products. Customer must request it specifically, or even to own an insurance company office.
Combines life insurance with investment instruments
Compared with link units, the price of premium term life insurance is much cheaper, can be up to 1/5-nya or more. But not the obligation means that the customer is reduced. Term life insurance does not have a share of investment, and thus the obligation to invest is now in the hands of the customer, not in the hands of insurance companies. Difference in price is much the customer should be used to invest at a time because the price of premium term life will be unduly expensive. The very best way to invest is to use the same instruments used by the unit-linked insurance, the mutual funds. Method to manage this fund as family called Buy term and invest the difference.
Glance there is no difference between taking a unit or use the links this method, but if we look more thoroughly have many benefits:
* No need to take a life insurance is not required at the time.
* No need to pay agent commissions and other administrative costs that are usually outrageously expensive.
* You can freely select the instrument from outside the investment provided by the link unit.
By using the method of 'Buy term and invest the difference', the end result is received the customer will be more optimally. Nevertheless, the required level of discipline that is higher than the customers themselves to set aside some portion of income to investment in consistently.
Some of the mistakes that often occur
"Term life insurance is not a good idea because the funds that we pay is burnt. While in the link unit we can get back the money we pay in full. "
Actually the link units are also used up the funds, but not too felt by customers due to income from the investment portion. Customers feel that the funds he pay increase in number and he still get the benefits of insurance. Of course, this is one wrong, because of the increased amount is the portion of investment, while the share of fixed insurance 'burn'.
Customers who subscribe method 'buy term and invest the difference' can also feel the premium payment does not burn to see if the deposit insurance premiums and investment as a unity that is not integral.
"On the link unit can be dropped out of the premium after 10 years, for example, the term can not be life."
First term life is not designed to be taken for life insurance as well as link units. Once the customer has enough savings, all debts have been settled and no longer dependent, it is no longer useful to take life insurance.
Second, the link provided in the facility to drop out to pay a premium, but still paid a premium to the customer to take the funds in the share of investments, sometimes without the customer. Customers who subscribe method 'buy term and invest the difference' can also enjoy the 'facilities', namely how to eliminate some of the results from the investment to pay a premium for term life. If the portion of insurance premiums and investment seen as a separate entity which does not, then the customer is no longer seemed to pay the premium.
"On the link unit, can also be reduced and the addition of insurance money at any time."
Indeed can be, but the portion of life insurance can not be completely eliminated. In addition, if the Insured take the insurance side (rider) with a certain level, could be forced to take money Insured insurance rate. Some insurance side (rider) on the unit requires the Insured link to retrieve the life insurance money with a minimum guarantee.
"I bought a unit linked whole life insurance or with the main objective to invest, not for the life insurance benefit."
This is one of the very wrong widespread. Because the unit link life insurance has a component, then there is no reason to buy a unit linked with the goal to invest. In this way the customers will only give money to companies with a free life insurance without a commensurate benefit.
Link unit consists of two components: life insurance and mutual funds. If the destination you want to invest without buying life insurance, and mutual funds are the right answers. If you want the guarantee of investment results, also available are guaranteed investment instruments, such as deposits.
"What if I take the term life insurance, and then fall sick one day before the applicable insurance is exhausted? Insurance company certainly will not want to extend the policy. "
In the term life insurance, customers have the option to extend insurance in accordance with the price set in advance. This extension can be done without conditions and without any medical examination should be performed. If customers want the extension, insurance companies do not have the right to reject it because it is already included in the contract that contained in the policy.
Although all term life insurance policy that I have see clause like this, there is good potential policyholders to ensure the existence of the article which is very important before buying them.
Bookmark, Share and Promote!
