17 Optimal Life Insurance Benefits for Various Risks
What is life insurance? Insurance companies have various kinds of insurance protection products, one of which is life insurance. This insurance is classified as 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.
The definition of 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, the family left behind will get financial guarantees with life insurance.
The death of the father/mother who earns a living will certainly make the family lose income and experience economic difficulties for years to come. Life insurance can be a form of anticipation for the bereaved family when they need financial support due to the death. The aim is to ensure children’s education, family financial sustainability, as well as the health and living standards of family members left behind. Of course, this is the most basic function of life insurance. So, do you want to know in more detail? Come on, see the discussion of Qoalathis time!
Types and Functions of Life Insurance
After knowing what life insurance is and its understanding, you also have to 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
Understanding term life insurance is life protection for a certain period of time, for example, 5, 10, or even 20 years according to the agreement between the policyholder and the insurance company. Usually, this type of insurance premium is paid in advance and is carried out annually during that time period.
But if the policy is inactive (lapse), the benefits will stop and the premium value will be forfeited. An example of term life insurance that is often encountered is credit life insurance, which provides life insurance protection for the duration of the credit. If the insured experiences the risk of death, the insurance will pay off the remaining loan to the debtor. So it doesn’t burden the other party. Already know the function of this life insurance?
2. Life insurance for life ( whole life )
As the name implies, the notion of whole life life insurance provides lifelong protection benefits. Usually, the protection benefits until the insured are 99-100 years old. In contrast to term life insurance, whole life insurance provides cash value that can function as savings and provides protection benefits at 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 minus the costs of closing the policy and paying premiums in arrears on whole life insurance products. Do you know what life insurance is Life insurance?
3. Endowment life insurance
The function of dual-purpose life insurance is to provide multiple benefits, both protection, and savings. This type of insurance product is usually found in education insurance. What are the benefits of endowment 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 whole life insurance, dual-purpose life insurance policies can generate cash value more quickly. The reason is that in dual-use insurance, the cash value will usually be the same as the sum insured at the maturity of the policy, so there is no need to wait until you reach the age of 99-100 years.
4. Unit-linked life insurance
The benefits of unit-linked life insurance are almost the same as whole life insurance. The difference is, if the life insurance is for life, the policyholder will only get a refund of the sum insured and an increase in coverage; while in unit-linked life insurance, policyholders will get additional investment returns. Seeing the function of life insurance, of course, it provides double benefits, namely as life protection and of course supporting investment or financial planning.