Life Insurance
Life Insurance

The Importance of Life Insurance, Here’s the Explanation

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Life insurance is an insurance service that is used to protect against the impact of financial losses or loss of income of a person or family due to the death of a family member (the insured) who was previously the backbone of the family.

In simple terms, life insurance is a type of insurance that aims to cover a person or family against unexpected financial losses due to the death of the insured.
There are different types of life insurance that people should know about. Especially in Indonesia, there are four types of life insurance that can be purchased according to need.

Among them are term life insurance, whole life insurance, unit link life insurance, and endowment life insurance.

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Types of life insurance and their meaning
Based on an official statement from Lifepal, specifically in Indonesia, there are four types of life insurance that you can buy according to your needs, namely:

Term life insurance

Term life insurance products are the basic form of life insurance. The protection provided can be arranged according to the desired period, starting from 5 to 30 years for the heirs to get the sum assured when the customer has died.

A good term life insurance is one that offers broad coverage at competitive premiums.

In addition to the sum assured, term life insurance also has additional coverage that is very useful, ranging from permanent disability compensation, premium waivers, to credit coverage. To get it, we need to buy additional insurance (rider) with additional premium costs.

Whole life insurance

In contrast to term, this type of whole life insurance offers maximum protection throughout the life of the customer, with a maximum age limit of up to 100 years.

Generally, this policy promises a return of premiums at the end of the insurance period. So, even though we are over 100 years old, the premiums will not be forfeited.
Interestingly, whole life insurance is usually accompanied by a Pension Fund. So, customers can prepare for old age well. In addition, there is also unit-linked life insurance for customers who at the same time want to invest.

Unit-linked life insurance

Later, the premiums paid to insurance companies are not all used to pay insurance costs, but are partially invested in various assets, such as stocks, deposits, or bonds. Of course, this is a long term investment
This insurance is not too familiar. Endowment insurance is a life insurance product with additional savings benefits.

Dwiguna life insurance

Part of the customer’s premium will go to the savings account, while the rest is for protection benefits. At the end of the policy period, the heirs will receive cash value in the form of savings and sum assured.

This product is suitable for people who have long-term financial plans, such as raising an education fund, retirement fund, or wedding fund.

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Five Reasons Why Life Insurance Is Important For You

1.Protect Yourself from Unexpected Events
The importance of life insurance for someone first is, to protect themselves from unexpected events that could happen in the future. Because we don’t know for sure what will happen to us in the future. And what will happen to the family, if we leave them.

Especially if you are the head of the family who is the backbone. You can imagine how they were after your departure. For that, it never hurts to register with life insurance to get coverage that will be accepted by the heirs.

Not only that, as long as you pay the insurance premium, the life insurance company will provide you with protection from all risks of unexpected events such as accidents, permanent disability so that you are unable to work, or other calamities.

2.Protecting Families from Financial Troubles
The next important reason why you should register for life insurance is as a step to protect your family from the risk of financial difficulties in the future. According to the insurance company’s promise, a policyholder who regularly pays insurance premiums, his heirs will receive the insurance costs.
In this case, if someone dies, it can be ascertained if his heirs (parents, wife, or biological children) can get the money promised by the insurance company. This money can be used as an aid if your family has financial difficulties in the future.

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3.As a form of self-investment
The next reason for the importance of life insurance is as a form of investment for yourself. Like investments in general, life insurance will provide many benefits in the future. Even though we don’t feel it, our children and grandchildren will feel it from the money we “invest”.

Investment itself will bring various benefits for us. One of them is forcing yourself to be someone who likes to save and appreciate the income we have. We can become someone who is even smarter in managing and managing money.

4.In lieu of paying off debt
Many do not know, if life insurance can actually be used to pay off debt. Life insurance in Home Ownership Loans (KPR) is considered to be a hassle in making and working schemes. In fact, this insurance can be used to protect mortgage debtors when there are risks such as physical disability, death, disaster, or other risks that can make it difficult for the debtor to repay the installments.

5.Gives Peace in Life
The last reason why you should register with life insurance is so that your life becomes calmer and you can feel a more meaningful life. The reason is, this life insurance will help you to realize the future with various plans or plans that you have planned.

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Closing

That’s the article about The Importance of Life Insurance, Here’s the Explanation so you can understand how important Life Insurance is. Hopefully this article is useful for you and thank you for visiting this website.

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