Besides health insurance, life insurance is also an important and even mandatory insurance product for everyone. This type of insurance can provide a death benefit or compensation to family or heirs in the event of the insured's death or permanent disability, leaving them unable to work.
In general, insurance companies offer two different types of life insurance products: pure life insurance and unit-linked life insurance. Unit-linked life insurance, on the other hand, offers insurance along with investment services. Pure life insurance, on the other hand, focuses solely on providing insurance protection tailored to the customer's needs.
Because of this, many people tend to choose pure life insurance products because they are considered more profitable and provide optimal protection. To prove this, you need to understand the ins and outs of pure life insurance. Here's a complete explanation.
What is Pure Life Insurance?
Pure life insurance is a type of life insurance product that offers financial protection against losses due to the risk of death. This insurance product is called pure because it only provides a sum assured (UP) as its primary benefit to the insured. This means that, unlike unit-linked insurance, pure life insurance customers do not receive investment benefits.
With life insurance products, the sum assured is paid to the insured's heirs and family by the insurance company. This ensures that they can continue living a more prosperous and secure life even after the family's breadwinner has passed away. Pure life insurance products can also be referred to as traditional insurance.
Furthermore, it's important for prospective customers to understand that this product has several important characteristics. One of these is that the coverage generally lasts for 5 to 20 years. Furthermore, the sum insured will only be disbursed upon the insured's death or permanent disability, preventing them from working. It typically doesn't offer a premium refund.
Benefits of Pure Life Insurance
The primary benefit of pure life insurance is providing financial security for the family in the event of the insured's death or permanent disability. This protection is especially important for insureds who are married and the primary source of income for their spouse and children.
For more details, here are a series of benefits and functions of life insurance.
Financing Daily Living
When the breadwinner of the family is no longer able to work due to death or permanent disability, the spouse and children are at risk of being unable to meet their daily needs due to a lack of income. Therefore, the premium promised by life insurance is crucial to ensuring that the surviving family can continue to live financially independently.
Paying Funeral Expenses
Furthermore, this insurance benefit also allows the insured to cover funeral expenses, which are generally expensive in Indonesia. Through the insurance money, the family can provide a proper burial for the insured upon death without experiencing excessive financial burden.
Children's Education Fund
Equally important, if the insured has school-age children, they can also secure their educational funding needs. Life insurance can cover the costs of a child's education up to college. This way, children can still achieve a brighter future even after their parents have passed away.
Pay Off Debts, If Existing
The final benefit is that the sum assured from this insurance can also be used to pay off outstanding debts, if any. This is especially important if you still have mortgage or vehicle payments due in the next few years.
How Pure Life Insurance Works
As an insurance product, pure life insurance works in a way that's actually not difficult to understand, including:
Protection Valid for a Specific Period
As previously explained, life insurance protection is generally valid for a limited period, usually around 5 to 20 years. However, with some services, this insurance protection can be extended to a certain age according to the service provider's terms.
Insured Amount Disbursed If a Risk Occurs to the Insured
Another important thing to understand about how pure life insurance works is that the insured amount will only be disbursed if the insured experiences a risk covered by the insurance. Some examples include death or permanent disability that prevents the insured from working. The insured amount will be distributed to the family or heirs according to the terms of the policy.
No Premium Refund Benefit
A number of life insurance services generally do not offer a premium refund benefit if the customer does not make a claim during the active insurance period. However, depending on the insurance company's policy, some life insurance products offer a partial premium refund under certain conditions.
The Benefits of Being Protected by the Best Pure Life Insurance
As an insurance product considered mandatory, there are many advantages and benefits to being protected by good pure life insurance, including:
Large Sum Insured
Because the entire premium paid by the customer is fully allocated to maximizing protection, the sum insured by pure life insurance is usually more generous and provides optimal protection.
Fixed Premium Amount
Another advantage is that the premium paid for pure life insurance will remain unchanged until the end of the insurance contract.
No Investment Risk
By not engaging in investment activities, pure life insurance customers will also avoid the risk of loss. However, conversely, customers also risk losing potential investment returns.
Flexible Premium Payments
Another advantage is that this type of insurance also offers a more flexible premium payment period to suit the customer's needs and financial situation.
Riders Available
To optimize the protection benefits provided, you can also apply for additional insurance, or riders. Importantly, remember that applying for these riders will usually increase the premium.
Optimal Protection and Affordable Premiums Are the Main Attractions of Pure Life Insurance
Essentially, pure life insurance is a product that fully protects its customers against the risk of death without investment benefits. This protection can be obtained at optimal levels and with affordable premiums, making it generally more beneficial for customers.
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