The Main Things to Look For Before Buying the Best Life Insurance

In choosing the best life insurance, the question that often arises is what type of life insurance product and how much protection to choose. You are familiar with the types of pure life insurance products available. Tailoring your needs to the available products is the best way to determine the product to be purchased. Therefore, it is important to know what your needs are and the people who depend financially on you.

Choosing Term Life Or Whole Life

The difference in the value of premiums and the loss of premiums is still a hot topic in choosing these two types of insurance.  Is it true that the difference in premiums between the two is very significant? After I compared it turned out not to be.

In some countries the difference between whole life premium and term life is very large (term life is much cheaper). But not in Indonesia, term life looks cheap at the beginning.

For those who are young enough, for example 30 yrs and do not have life insurance, choosing term life is very detrimental. This is because you can only be protected for a maximum of 20 years and must pay during the protection period. Although it can be extended after 20 years, the premium to be paid is already very expensive because it is 50 years old, and protection can no longer be for 20 years.

Not to mention, when you get a disease that is quite costly to get treatment so you have to stop paying the term life insurance premium chosen. Then the life insurance coverage and premiums that have been paid are lost.

But term life is very profitable to protect other more specific risks, such as:

1. Protecting debt

Maybe you have car, home, or business debt installments. If the debt is paid off before the debt is paid off, of course we want the family to still own the asset without having to be a burden for them to obtain it by paying off the debt with the sum insured they received as heirs. Even if we can pay off the debt early, then we no longer need to continue paying the term life insurance coverage.

2. Have a son / daughter who is in college

It takes 4-7 years to complete the study at the university bench. Within that time frame we have to make sure the costs remain. Because of the relatively short time, choosing the whole life type is very detrimental because you only need to be protected for 4-7 years.

3. Protect investment or business objectives

When starting a business or investment, selling property for capital is a wise move rather than having to owe.  We must continue to learn and manage before profiting from the business or investment. Of course, the time required to return the capital has been calculated clearly, maybe 3 or 5 years so that all the assets you have sold can be recouped and enjoyed by the family. The capital can be returned because you run it. Choosing the type of term life insurance is very suitable and cheap to protect this short risk.

Choosing a Great Life Insurance Coverage

The amount of protection is the specified sum insured. To determine the magnitude of the small we must be able to estimate how long we can afford to be productive, or live.

Life expectancy

We are not God, no one can count exactly how long we can live. However, such variables are clearly needed to calculate the needs of life insurance. Because of the uncertainty, determining life expectancy can be done in several ways:

Based on retirement age

Because basically, a long life time is clearly not guaranteed whether you are still productive or not. Therefore, retirement age can be used as a reference for the expectations of our lives. If you die before retirement, it means that the family loses the income they have received from you.

Family's time of financial dependence

To calculate it, we can determine, for example at what age the child will be established. Because when they are established, the number of your financial dependents will decrease.

example:

If you are currently 35 years old and the child is at least 5 years old, you may be able to take into account when the child is no longer financially dependent on you, say when he or she is 30 years old, then you must ensure within the 25-and-five-year period your income should remain.

Great Income At The Moment

Many are stuck in giving life insurance by taking out excessive sum insured because they feel that they can still afford the premiums that are quite cheap, or even take the minimum sum insured then no longer review the value of the protection so that what is done does not provide optimal benefits.