THE IMPORTANCE OF LIFE INSURANCE FOR FUTURE SAVINGS

Swan Pedia - Have you ever thought about having life insurance? Or maybe we actually don't know what life insurance is, and its benefits and uses for us in the future.

The Importance Of Life Insurance For Future Savings

Here we summarize just for you.

Life assurance or life insurance is an agreement or contract issued by a life insurance company as an Insurer to someone who is Insured. This life insurance is a service for dealing with unwanted risks in the future. And life insurance is an insurance product if one day you experience an illness or accident until death, then your family will receive the sum assured. The amount of money received has been agreed upon at the beginning of the agreement. But before that, you must pay a premium (either monthly or annually).

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But unfortunately, public awareness of having life insurance protection is still very low, even though having life insurance is a form of care and protection for your family and loved ones so that some money will be received by our heirs and used by the family to be able to continue life and chase dreams even though they can no longer be with them.

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Realizing that risks in human life cannot be eliminated, most people choose to set aside some funds from their income to be saved for future needs to be fulfilled.

Types of life insurance that you should know

Here are life insurance products, of course, each of which has different uses and benefits. These types of life insurance aim to address various needs and circumstances in society:

1. Term Life Insurance (Term Life Insurance)

That is insurance with its function to provide protection to the insured within a certain period of time. Usually, this type of insurance offers a contract for the next 5, 10, or 25 years with a fixed premium and reduced payments calculated. And after your insurance period has expired, you can freely choose to continue the insurance protection period or let the protection expire or expire. The benefits of this term of life insurance are that it provides protection for a predetermined period of time with the risk of death, permanent or partial disability, up to medical expenses, and hospital care (as long as the insurance is still valid)

2. Whole Life Insurance

This type of life insurance provides lifelong protection, although life insurance companies limit the coverage benefit to 100 years. This type of insurance provides lifelong coverage with a fixed premium rate (premium rate) which does not increase in line with the age of the Insured. And it is recommended for those of you who have no dependents and want benefits that are more than just death benefits and savings for emergency needs such as hospital costs. At the end of the contract, the sum assured will be given in full by the insurer.

3. Dwiguna Life Insurance (Endowment Insurance)

That provides a certain amount of benefit whether the Insured lives until the end of the insurance period or dies during the coverage period. Dual-purpose life insurance has a maturity date, which is the date of payment of the sum insured by the insurance company to the policyholder if the Insured is still alive. The maturity date will be reached at the end of a period that has been determined from the beginning of the agreement, or when the Insured reaches a predetermined age. This type of life insurance is recommended for those of you who want to ensure the availability of education funds for children, want to have funds for unexpected needs in the future, and want to have a larger pension fund for old age. Then the drawback of this insurance is because this type of life insurance has two benefits, which are like combining the benefits of term life insurance with whole life insurance, so the premium payment is quite large, it can reach millions of rupiah per month.

4. Unit Link Life Insurance

is insurance that combines the benefits of insurance with investment. The premium paid will be allocated into two separate management mechanisms, namely the management of the basic premium for protection purposes and the management of investment premiums. Investment premiums are managed by the Investment Manager or the company's investment experts. By choosing this insurance, the Insured can benefit from insurance protection and returns from investment in unit-linked products by life insurance companies.

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Then What Should Be Prepared Before Having Life Protection?

1. Set aside Budget Funds

It is not easy to fill in funds every month for things that we cannot enjoy right now. Like the saying "sick first, have fun later". That means the money we save today will be very useful for our families in the future. At least, set aside 10-20% of monthly income to pay special life insurance premiums.

2. Have Insurance While Healthy

Every insurance company has special provisions for prospective buyers of their insurance. The most common is the health condition of the policy candidate. Even health conditions can affect the payment of premiums to be paid, usually, the younger and healthier a person is, the lower the premiums to be paid.

3. Adjust to Needs

Before choosing insurance, it is better if you first study what products are offered and compare one insurance product with another. Make sure the life insurance benefits offered are according to your needs, for example, a total disability benefit that allows us as the insured to get the sum insured when we are no longer able to work. In addition, make sure the life insurance company you choose is a credible and trustworthy company.