financialtreat – will explain about Get to know the Types and Benefits of Freedom Life Insurance! which you will get in the following article. let’s look at this article carefully!
Many of us certainly already know the importance of having freedom life insurance. Especially after going through the pandemic period of almost two years, you certainly understand how much a person’s life does not go through from the risk of death. Not stopping there, death can also pose another risk, namely the disruption of the financial atmosphere of the family being left behind.
Well, this last risk that can be manage by having protection in the form of freedom life insurance. However, the amount of life insurance offere sometimes makes us confused to choose what product suits our needs. So, before buying life insurance, it’s a good idea to be aware of the variety of life insurance. Let’s look at the following explanation.
Come on, Get to know the Types and Benefits of Freedom Life Insurance!
Life insurance without cash value
This product is called cashless life insurance because it only offers life-giving benefits within an exclusive period of time. Life insurance without cash value is also the simplest form of life insurance. In order, this insurance is often called pure life insurance. Here are some types of life insurance without cash value:
1. Term life insurance
Term life insurance or term life insurance is life insurance that adds the coverage period in an exclusive period of time, for example 5 years, 10 years, or moreover 20 years, adjusted to the agreement between the policyholder and the insurance company.
In general, this type of insurance coverage contribution is paid in advance and is carrie out annually during this period. However, if the policy is lapse (inactive), the support benefit will stop and the value of the insurance coverage contribution will be forfeited.
If the risk occurs when the insured is still in the coverage period or while the policy is still active, then the beneficiary – generally the family left behind – will receive compensation or sum insure (Up). The definition of UP in life insurance is the money liste in the policy, which is the right of the beneficiary.
If the insure does not experience risks during the guarantee period, then the policyholder must extend the policy so that the insure can again get UP support and benefits if the risk of death comes. Conversely, if the policyholder does not pay the insurance coverage contribution, the coverage era is automatically complete and the policy lapse.
Insurance coverage dues. Insurance without cash value usually has a nominal value that is not large the value of insurance coverage contributions that are affordable by many people is comparable to the benefits offered, namely support in an exclusive period of time.
2. Credit life insurance
An example of pure life insurance as well as term that we often encounter is life insurance that provides credit agreements such as KPR and KKB. This life insurance is also called credit life insurance or credit life insurance.
Credit life insurance is commonly owne by people connecte to banking credit because it is generally a requirement from the bank to customers who apply for credit. Credit life insurance includes pure insurance because it only provides additional simple benefits, namely reimbursement of debt residues if the insure dies during the coverage period.
In order, if the risk of death occurs and the debt has not been paid off, then the family left behind will not be charge by debt installments, because the insurance company will pay off the residue of the debt. Credit life insurance is also called term life insurance with the guarantee era which is directly proportional to the tenor of the debt.
3. Micro life insurance
Micro life insurance is life insurance that provides benefits in the form of death compensation, with a short period of assistance, in a place or an exclusive community. For example, micro life insurance for toll road users, public transportation users, life insurance for motorists’ communities and motorcycle taxi application users, and so on.
Micro-life insurance is not unlike the joint venture of compensation money followe by union members. However, the management of micro-life insurance understands better because it is done by insurance companies. With this insurance, it can be use as a reference and can be manage by micro-insurance better in the future.
Life insurance with cash value
Adapte to the name, this model of life insurance not only offers benefits in the form of Up, but also cash value. The definition of cash value in life insurance is an amount of money which is the redeem value of the policy at the time of the exclusive, as the right of the policyholder. The cash value can be disburse while the insure is still alive. Insurance with this cash value can be groupe into:
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1. Whole life insurance, or whole life insurance
As the name implies, this insurance adds a grant until the insure reaches 99-100 years, or in other words for life. The specialties of this model of insurance that distinguish it from term life insurance are, in addition to providing additional benefits in the form of life giving, also providing additional cash value or developing policyholder funds.
This cash value can function as a savings that can be use to pay insurance coverage contributions whose amount remains for life, especially when the policyholder has no income. Thus, the policyholder can not pay the insurance coverage dues in cash, but the policy remains active and can add support.
In whole life insurance products, if the policy is no longer active until the insure dies. The policyholder can still disburse the remaining cash value after deducting the costs of closing the policy. And paying the insurance coverage contributions that are in arrears. The cash value of the policies offere by most of this type of insurance is usually not very large. Because this product does target people who still prioritize protection.
Whole-life insurance usually also offers a variety of additional benefits or riders. Along with the more diverse benefits. The insurance coverage contributions that are subject to whole life insurance are. It also very expensive when compare to pure insurance coverage contributions.
2. Dual-purpose life insurance or endowment insurance
Dual-purpose insurance or endowment insurance is life insurance that provides double benefits, both protection and savings. We often encounter this model of insurance products in education insurance. The specialty of dual-purpose insurance is the benefit of insurance that is certain and guarantee. Whether the insure is still alive until it is off due or dies before it is release due.
What distinguishes dual-purpose life insurance from whole life insurance. That policies on dual-purpose life insurance can form cash values faster than whole life insurance. This is because the cash value of dual-purpose life insurance. That will generally be equal to the UP at the maturity of the policy. In order, the policyholder is likely to be able to cash out while still alive. Generally following the child’s education level.
Endowment insurance policyholders also generally emphasize cash value rather than protection. This results in endowment insurance coverage contributions being greater than pure life insurance. Dual-purpose insurance customers can use cash value benefits as long-term savings. For example, to pay for the needs of children entering junior high school. Entering college, or to pay for daily expenses at retirement.
3. Variable life insurance or unitlink life insurance
Unitlink life insurance is an insurance product associate with investment (Paydi). In addition to offering lifetime protection benefits, unitlink life insurance also offers cash value. Unlike the cash value in whole life and endowment. The cash value in unitlink is forme from the results of fund development through investment instruments in the capital market. That is why, the cash value in variable life insurance moves in the same direction. As the rise or fall of the capital market.
In making investments, customers also get flexibility. For example, customers can increase or decrease their investment funds and also decide where their investment funds will be place. This freedom of placing funds is too likely for the customer to adjust the portfolio to his risk profile. That is why, the risk of investment in unitlink life insurance is fully covere by the policyholder.
With the explanation above, which discusses freedom life insurance. Hopefully you will better understand this variety of freedom life insurance, here are the benefits offere. So, you will find it easier to choose a freedom life insurance. That suits your needs and thank you for your attention.