Important reasons to have life insurance, these types, and how to calculate it
One of the insurance products is life insurance which is now increasingly in demand by the public.
Protection in life insurance can maintain the quality of life of family members, if due to unforeseen circumstances, the policy holder leaves forever as the head of the family.
Not only that, life insurance can also help you balance your short-term and long-term finances. But of course don't forget, you have to pay insurance premiums regularly in return. You can pay per month or all at once per year.
Because there are a variety of interesting and useful life insurance products on the market, you must carefully choose the right type of life insurance product.
To make it easier for you to find out, let's see through the following article!
4 types of life insurance
One of the most important things to understand before buying life insurance is about the types and benefits that you will receive.
1. Term Life Insurance
This type of life insurance is perfect for those of you who want insurance with protection benefits for a certain period of time.
The protection period options provided are also quite long. Between 15, 20, 25 years, or even more. It is tailored to the needs of the beneficiary.
This insurance is also suitable for people at a young age or who have a healthy and fit condition. The transactions made are also not difficult. You can determine the monthly premium amount according to your income.
However, the premium that has been collected into this term insurance will be forfeited when the contract expires.
Premium costs will also increase if you intend to extend the insurance contract. That is why the price of this type of insurance offer is very affordable.
2. Whole Life Insurance
This type of insurance is suitable for those of you who want to make long-term health investments. Why? Because every premium paid into insurance savings will continue to increase and can be taken at any time.
The age limit for benefiting from this insurance is generally up to the age of 100 years. When the insured dies and has never made a claim, all premiums that have been paid to the insurance will be returned in full.
Over time, it is possible for the beneficiary to pay a sizable premium at a certain age. This is because the need for protection needed is also very much.
3. Dwiguna Life Insurance (Universal Life Insurance)
As the name implies, this type of insurance provides two benefits at once. The two benefits are benefits with a certain period of time, as well as savings benefits that have been paid for through premiums.
This type of insurance is also quite flexible, you know. How come? As a policyholder, you can use the savings whenever you want.
4. Unit Link Life Insurance (Variable Life Insurance)
This type of insurance is perfect for those of you who are beginners, but want to provide early protection for yourself or your family through insurance.
This insurance gives you the opportunity to make investments that are not much different from pure investments.
The amount of premium that will be given for investment is not entered into the stock market at once, but through a sub-account of the insurance company.
In addition, investment returns will always be influenced by stock market movements. Of course this will result in an erratic or fluctuating amount.
How to calculate life insurance premium
The first step you have to do is to know in advance the amount of the sum insured you need. The method is also quite easy, you know. You can refer to the following formula.
Premium Rate x Sum Insured
In calculating the amount of each individual's premium can not be uniformed. Each company usually has its own premium calculator.
For that, don't hesitate to consult the insurance company directly. This step is done so that you get accurate information.
Amount of life insurance premium
The amount of premium you have to pay varies from each type of insurance you choose.
This is because it is influenced by the following factors:
1. Insurance type
How to calculate the amount of premium costs that must be paid is to know the type of insurance. You can use a life insurance type calculator that will help you determine the right insurance choice.
The time period will determine the size of the premium. For example, the premium for 10 years of coverage is lower than 20 years.
The younger you are to have life insurance, the more affordable the premiums you have to pay.
4. Sum Insured
The more sum insured you need, the greater the premium you have to pay. For example, an UP of Rp. 1 billion would require a higher premium than an UP of Rp. 500 million.
5. Health Conditions
Before having insurance, the insurance company will usually ask for your health or lifestyle history, such as smoking habits, doing extreme sports and having had a serious illness or undergoing surgery.
If you have experienced one or two of these conditions, your insurance premiums will usually be higher because of the increased risk of disease.