This insurance article will discuss everything about insurance. We may often hear the term insurance or other terms also called the coverage. But, do you know what that insurance? For more details, refer to the article‘s general insurance carefully.
Insurance or in English called the insurance is a term that refers to the system, action, or business in the form of financial protection. Financial protection can be used for life, health, property, and others. In other words, this is a kind of transfer of insurance risk from the first party to the other party.
Types of Insurance
In Indonesia, there are two types of insurance, which is traditional and nontraditional. This traditional type of insurance is divided into three types, namely term life or term, whole life or a lifetime, and endowment or endowment. You are unfamiliar with these terms? Let’s discuss everything in common article of this insurance.
1. Term Life
Term life insurance will only provide protection to the specified time period. Protection may be very short or it could be for decades. If not arise risk, term life insurance money becomes charred or will not be restored again.
Term life insurance is to have the lowest premiums than other types. Money insured may also be greater and could reach billions of dollars in premiums meant to be not so this drain bag. Term life insurance has no cash value.
That is, when the current contract expired term life insurance is the insured person is still in good health or not happen anything whatsoever, the contract will expire and there is no any money given to the insured.
Not a few people who think that buying term life insurance was considered to be just a waste of money because there is not any money received when the contract expires and the insured had not died. But, wait a minute. We should be grateful because good health and longevity.
Insurance system is the same as if we hire a security guard one night in bed to keep home security and avoid robbery. If the situation at home at night it safe and not a robbery, if we could take back salary that has been given the security guard? Instead, we are duly grateful because inhabited dwelling is safe.
2. Whole Life
The second type is whole life. Whole life insurance is different from the previous because it contains the value of savings. In addition, the protection period is also longer or longer, which can reach 99 years. Whole life insurance is often regarded as a refinement of term life insurance has no cash value.
In whole life insurance, when his contract runs out and the insured is still in good health, then there is a cash value that is submitted. However, the risk is the premium paid will be more expensive because there Pastia claim risk. Few people may live healthy until age 99, is not it? Yes, the life expectancy of men in Indonesia is 65 years, while the woman is 70 years old.
The cash value of whole life insurance policy can be used as collateral for loans as well as a bonus dividend available for whole life insurance policyholders of the company. In addition, if you can not pay the premium, the policyholder must have taken and from this cash value. These are features that do not exist in the term life insurance.
But unfortunately, the interest of the savings that have been invested is much smaller than the interest rate on the market. Existing savings in whole life insurance is only paying interest at 4% per year, not to mention cutting costs and taxes.
When making a purchase policy, the cash value does look great. But, try to count back by entering the real inflation factor common with an average of about 12 percent, then the cash value had to be eroded be small when the policy is due.
Endowment is a futures product which has a double advantage. The nature of this endowment is like a futures insurance as well as savings. Before the presence of unit-linked products, endowment products very popular.
The shape of endowment insurance is very diverse. In addition, there is provided a bonus given regularly, for example, three years or five years. But, endowment insurance premiums more expensive than whole life insurance. Prominence was more down along with the presence of link units. One more thing, because often members bonuses, endowment insurance costs is increasingly burdensome insurance company.
4. Unit Link
Unit linked insurance is a type of insurance or nontraditional. This non-traditional type of insurance is insured with two bags, the bag for protection purposes and pockets for investment.
Most of the premium paid money used to pay for protection, while another part is stored in the form of unit-linked funds.
The policy holder will be asked to choose the investment will be placed where. The choices can be placed on balanced funds, equity funds, money market and fixed income mutual funds.
This link unit is closely related to the so-called capital markets. In addition, these products are difficult to understand and very complicated so that policyholders should be seriously studied and studied this product.
Insurance Articles – The Importance of Understanding Investment Insurance
Maybe some of us are confused about how to invest in the form of insurance. This is reasonable because it is now very much deals with various types of insurance products and profits. As we know, today there are several types of insurance that circulated widely in the community such as property, life, and health.
Actually, this insurance is not needed by everyone, but almost everyone needs insurance or coverage. So, what actually benefit from this insurance? Insurance or coverage purchased someone because he wants to protect his property, wealth, and income from expenses that are unexpected.
Let’s take an example in the practice of health insurance. Someone whose health has been borne by the company he works no longer have to buy health insurance, unless it has certain diseases such as cancer or other diseases.
Then, what about the insured property? For people who are single and do not have a property such as a car or home, property insurance is also not required.
Life insurance is also not needed? Well, life insurance is needed to protect a person from obtaining income. The life insurance is necessary for those who become the backbone of the family.
In this case, a single who do not have dependents does not need this kind dependents. Conversely, people who are married and have a family is in need of a dependent because the soul already have dependents.
If the person who has this kind dependents affected or experience something, the family will receive compensation from the insurance. Thus, the family can still live a life of welfare money earlier.
Advantages and Disadvantages of Investment Insurance
What are the advantages and disadvantages of insurance investments? The following are the advantages and disadvantages that by this unitlink.
* All in one (life insurance, mutual funds, accident, and the other into one)
* Payment is pretty easy and can be via credit card.
* Forcing everyone to invest and obtain coverage.
* The premium will be more expensive than buying the products separately.
* The benefits tend to be smaller.
* You do not have any information about the type of coverage in depth and can not choose their own coverage.
* The value of cash acquired in the early years can be very small. In fact, it may be smaller than the premiums that have been deposited.
That is the advantages and disadvantages of insurance investment. Hopefully this article useful insurance!