What and How Whole Life Insurance

Whole Life Insurance

The word life insurance is already familiar to the ear. And maybe you also unwittingly heard about life insurance for life. Then, a question mark arises what is meant by life insurance for life.

However, it just passes because of the lack of information obtained, so you are still not interested in trying it. For those of you who know more, here is an explanation of life insurance for life, from its definition to its advantages and disadvantages, as well as the types of protection provided, so that it can be considered and can make good use of it.

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1. What is Whole Life Insurance?

Have you ever heard of whole life insurance? Yup, that is the name of Whole Life Insurance.

Life insurance for life is a type of insurance that provides protection to participants for life or a maximum of up to 100 years. Of course, this could be a consideration whether or not to take out life insurance for life. Because the average age of a person is rarely enough to reach up to 100 years.

Even so, we certainly never know how long we will survive, right? Because it is beyond human control. Therefore, there is nothing wrong with preparing all possible things in the future.

The essence of life insurance for life is to provide coverage to the participant's heirs when this participant dies. So that the family that is left behind will not experience difficulties and financial problems at a later date.

This is important, especially if there are still family members who need money. Of course, this type of insurance is quite useful to follow.

And this Whole life insurance is considered more appropriate for participants aged around 40 years and over. Why? Because this insurance focuses on providing protection in the event of a risk of death and the insured wants to leave a legacy to his heirs.

In addition, this insurance can be used as an education fund, pension fund, and others, from the accumulated cash value and set as the initial goal when applying for this Whole life insurance.

2. Type of Life Insurance Policy for Life

Life insurance for life has several types of policies, including:

  • Straight life policy)

In this policy, premiums are still paid until the insured dies or until the age of 100. So that the cash value will be formed as long as the policy lasts or equal to the basic sum insured when the participant reaches the age of 100. If the participant is still alive until the age limit, the insurance coverage will be paid and the insurance protection will automatically stop.

  • Limited-payment whole life insurance

This type of policy is intended for people who want to have Whole protection, but don't want to pay a Whole premium. In other words, premiums can be paid within a certain period or until the participant is of a certain age. Even so, insurance protection continues for life. So those premium payments are made in a shorter time.

  • The policy does not participate

In this policy, if the insured party dies, the heirs will receive a limited amount of the basic sum insured. There is no bonus element from the insurance company. Only limited to the premium paid.

  • Participating policy

This policy allows the insurance company to share benefits with participants, provided there is an additional premium. So that participants will receive additional bonuses every year. The amount of the bonus cannot be guaranteed with certainty, because it depends on the profit of the insurance company.

After knowing the meaning of life insurance for life, next are the advantages and disadvantages of this insurance. Anything?

3. Advantages and Disadvantages of Whole Life Insurance

Currently, there are many life insurance products that offer coverage for life or maximum age. If you don't want to feel disappointed after making a decision, it's good to check the strengths and weaknesses first.

Thus, insurance participants can get the maximum benefit from the type of insurance chosen. Do not let the decisions that have been taken be deemed burdensome and do not provide benefits according to the original objectives.

Here are some of the advantages or benefits of life insurance for life according to the premium category:

  • Fixed premium

With a fixed premium, the amount of premium paid from the beginning to the end of the coverage period will remain unchanged. So that participants do not need to worry if there will be an increase in the amount of premium in the future.

This will also help participants determine how much premium they can afford to pay until their retirement. So that there is no fear that membership will end suddenly because it is unable to continue the premium.

  • Premium is refundable

What are the benefits of life insurance with refundable premiums? In this type of insurance, whether there is a claim or not, the value of the paid premium can be returned after a certain time. Therefore, paid premiums do not just disappear.

  • Premiums that can be paid flexibly

This type of premium has the benefit of being sure that the payment is flexible, or you can choose, whether it is within 5 years, 10 years, or 20 years. Even so, the protection provided remains for life. So that the premium payment period can be estimated according to the ability of the participants.

Well, flexible premium payments certainly have drawbacks, namely that premiums are usually quite expensive because these premiums are only paid for a certain period of time but are for life-long protection.

Another drawback of this type of life insurance, where the payment can be flexible, is that participants are required to do a health check first. Because the insurance company usually does not want to cover participants with a history of serious illness because it can harm the insurance.

Then, what types of benefits are provided?

There are several types of protection provided by life insurance for life. For more details, here are the benefits of protection that will be obtained by participants, namely:

Guaranteed Cash Value

One of the benefits of this Whole insurance is the guaranteed cash value. The guaranteed cash value is usually not very large. The amount depends on the accumulated premiums given.

Unsecured Cash Value

The next benefit is in the form of added value. This value is not guaranteed because it is the result of investment development. So the amount depends on the on going investment interest rate.

Choose Life Insurance according to your wants and needs

This brief overview of life insurance for life certainly adds to our understanding of the types of insurance. It is very important for us to get information about life insurance for life before deciding to buy it. Because, by understanding and understanding, it will be easy for us to decide and choose according to our wants and needs for life insurance for life.

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