What is life insurance ? Insurance companies have a variety of insurance protection products, one of which is life insurance. This insurance is the most widely used by the public. This proves that public awareness of the safety and interests of their families has been quite good. The benefits of life insurance do provide security guarantees and a sense of comfort, especially in financial planning.
Whats is The Life Insurance
Life insurance is an insurance product that provides protection from risks after death or physical disability that may occur. That is, when a breadwinner in a family dies, then the family left behind will get financial guarantee with life insurance.
The death of the father / mother who earned a living certainly made the family lose income and experience economic difficulties for years to come. Life insurance can be a form of anticipation for families who are left behind when they need financial support due to the death. The goal is to ensure children's education, family financial survival, as well as the health and viability of abandoned family members. Of course, this is the most basic function of life insurance.
Types and Functions of Life Insurance
After knowing what life insurance is along with understanding, you should also know the types. Each type of insurance has different benefits. Here are the types and functions of life insurance that you should know.
1. Term Life Insurance
Term life insurance is life protection within a certain period of time such as 5, 10 or even 20 years according to the agreement between policyholders and insurance companies. Usually this type of insurance premium is paid in advance and done annually during that time period.
But if the policy is not active (lapse), the benefits will stop and the premium value will be forfeited.
Examples of term life insurance that is often encountered is credit life insurance (credit life insurance), which provides life insurance protection during the credit period. If the insured is at risk of death, the insurance will pay off the remaining loan to the debtor. So it doesn't incriminate the other party. Do you know the function of life insurance?
2. Whole Life Insurance
As the name implies, the notion of whole life insurance provides lifelong protection benefits. Usually the benefits of protection until the insured is 99-100 years old. In contrast to term life insurance, life insurance provides cash value that can serve as savings and provide protection benefits with a fixed premium rate so that it does not increase in line with the age of the insured.
If the policy is no longer active until the insured dies, the policyholder still gets the promised cash value reduced by the closing costs of the policy and the payment of premiums in arrears on life insurance products for life. Do you know what life insurance is for life insurance?
3. Dual Life Insurance (Endowment)
The function of dual life insurance is to provide double benefits both protection and also there is an element of savings. This type of insurance product is usually found in education insurance. What are the benefits of dual life insurance? Of course, insurance protection is certain as long as the insured is still alive until the due date or dies before the due date.
The difference with life insurance for life, dual-use life insurance policies can form cash value faster. The reason, on dual-use insurance the cash value will usually be the same as the sum insured on the maturity of the policy so there is no need to wait until it reaches the age of 99-100 years.
4. Unit Link Life Insurance
Unit link life insurance benefits are almost the same as lifetime life insurance. The difference is, if life insurance is for life, the policyholder will only get a refund of coverage and increased coverage; While on unit link life insurance, policyholders will get additional investment returns. Seeing the function of life insurance, of course, provides double benefits as life protection and of course supports investment or financial planning. Benefits of Life Insurance for the Community.
Benefits of The Life Insurance
Life insurance is one of the best-selling insurance products and is not inferior to health insurance benefits.
1. Benefits of life insurance as protection from the risk of death
The main benefit of life insurance is that it can protect the insured from various forms of risk of disaster that may occur in the future. For example, the head of the family died as a result of an accident or any cause that caused loss of livelihood.
By having insurance which is also called death insurance, the insurance company will pay a certain amount of coverage if the disaster occurs in accordance with the applicable policy.
2. Benefit compensation for permanent total disability or partial disability
The best life insurance products are able to provide insurance benefits in the form of protection from the risk of partial disability or permanent total disability, in addition to protection from the risk of death.
The insurer or life insurance will pay the insurance benefits (amounting to 100% of the sum insured or according to the agreed policy) and then the insurance will end if the insured has a total permanent disability due to an accident. Generally, the amount of coverage will be provided with a payment system at once.
3. Ensuring the survival of the family or heirs
Life insurance plays an important role in ensuring the survival of other family members when the head of the family no longer has a livelihood. These benefits certainly help provide certainty in preparing for your future and family, such as children's education and financially protected family life in the future.
By having life insurance, it means that you have kept your family and loved ones from the risk of financial loss and free the heirs from the burdens of dependents that can be difficult. So the benefits of jini insurance to maintain the continuity of family property.
4. Help manage finances well
Life insurance is one of the important components in doing healthy family financial planning. By having it, the benefits of life insurance work as a protector of financial conditions that become more stable despite unexpected risks in the future. In addition, indirectly, you will be forced to commit to leaving a little nominal of income in order to pay for life insurance in a disciplined manner. Therefore, you will become more frugal and wise in managing your income and expenses.
5. Manage money appropriately
Another life insurance benefit is that it helps you allocate funds for the future. If lifestyle tends to be wasteful, life insurance can help you save and set aside some income to pay insurance premiums periodically. Of course this is more useful because you can get insurance benefits to prevent various financial losses in the future.
6. Prevent large losses
If spelled out as a derivative, other life insurance benefits related to finance is as a deterrent to the occurrence of even greater losses aka minimizing risk. Insurance will act as an insurer of losses incurred with the amount of money that will be given in accordance with the agreed policy. This means that you and your family do not have to worry about financial conditions if you experience critical illness because you can focus more on healing physical losses.
7. Life insurance benefits that provide a sense of calm and safety
We all know that nothing is certain in this world, including falling ill or dying that cannot be predicted when it will happen. Therefore, having life insurance is the same as preparing countermeasures for all possibilities that can occur.
In the end, you can feel calmer and safer because of life insurance that can bear financial losses. The benefits of life insurance can be likened to an emergency fund if the backbone of the family can no longer be a financial support.
Here are some of the benefits of taking life health insurance. Hope it helps for you.
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