Having insurance coverage, of course, will make you feel calmer. This is very important, especially for those who have a number of dependents or become the backbone for the family.
With the insurance guarantee, then you do not need to worry about various risks that may occur at any time, at least your dependents will receive some sum insured to continue their lives. However, is it true that needing this life insurance service for life is very important?
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Life insurance, for life, can be the right choice for some people. However, not necessarily for you, because everyone must have a different understanding related to this. At first this product may look so profitable, but once you understand more details, it is possible that you will have a different opinion related to it.
1. Purpose of Life Insurance
Before deciding to buy a product, you certainly have to understand well the purpose of the purchase that you will do. The same is also true when going to buy life insurance products, so that they can get maximum results on the purchase.
Like other life insurance, this life insurance is also intended as a form of financial protection against family members (dependents) owned by the insured, if at any time there is a risk to the insured. This will be a financial guarantee for the family left behind, if the insurance participant who becomes the breadwinner dies.
In these conditions, it is likely that the family's finances will be disrupted because the source of income is lost, so this amount of sum insured will be very helpful to them.
In the above understanding, then life insurance will be appropriate if you have the following two things:
- There are people who must be protected, where the person is the backbone / source of income for his family.
- There are families (dependents) who depend on people who need such protection.
2. Lifetime Life Insurance Costs
Understand correctly, that no insurance service is free, let alone a free one for life. Although insurance sales often lure this product as a premium-free service after the 10th year, it will basically still pay for it with your money.
In unit link insurance services, a portion of the premium funds will be invested as investment funds on some instruments that are considered appropriate by the insurance company. Then in the 11th year, the investment results are then paid every month by the insurance company as your next insurance premium. So, you will still pay a certain amount of premiums each month, not free.
However, in any insurance service, if you do not make premium payments, then the protection obtained will also be stopped. The same is true in unit link investments that are generally used as life insurance for life.
If the investment deteriorates and does not yield, then you still have to pay a premium, even though it has entered its 11th year or after. Understand this risk well, so as not to experience losses due to the purchase of insurance. There are no free premiums in life insurance or other insurance either.
3. When do you and your family need protection?
As its function, life insurance is used to provide protection for family members who are your dependents. However, at old age (over 90 years old) are not family members / children have entered adulthood and even established in finance?
If referring to this reality, then using life insurance services for life will feel a little excessive and no longer provide maximum benefits for families who are likely no longer dependents.
For those who have dependents, using life insurance until the age of 70 years is still quite appropriate and has maximum benefits. However, at a very old age, it seems like this will not have the same benefits anymore, because you may no longer have dependents at that age. So, what protection should be paid every month?
4. Life Expectancy
Consider this as well, because it can make it a smart indication in making decisions related to this insurance. Life insurance will provide protection until the age of 99 years, this is certainly an age that is very rare for now.
You will pay a long premium, for a service that may not be used to the fullest. Currently, the life expectancy of Indonesians is about 68 years for men and 72 years for women. You'll know how old you'll be, but it's important to estimate that by comparing it to your current life expectancy.
5. Ideal Age of Protection
This can be seen or estimated at what age people's life expectancy is now, and also at what age can approximately stop providing financial support to children or dependents in the family.
This may be different for each person, because people who are dependents may also have special needs or cannot work forever, so it will require special financial preparation for it.
But if you refer to normal conditions, at least insurance coverage until the age of 70 years is enough. By the time you're 70, it's likely that your dependents will be well established and economically independent, so they can support themselves.
Not Always Right and Suitable for Everyone
Life insurance products for life, may be the right choice for some people, but not necessarily right for you. Always consider the various aspects of life insurance wisely, so that you can understand and also proper calculations of its use. That way, you can understand and choose a number of maximum benefits over using life insurance.
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