Insurance Termlife (futures)
Term insurance provides protection only in a limited period only. Protection can be as short plane ride from Jakarta to Semarang for less than two hours or as long as 20 years. Typically, there is a time limit of insurance protection. In addition, if there is no risk, the insurance money is not returned or forfeited.
This type of insurance has a premium cheapest among other insurances. Money can be insured, reaching billions with a premium that is not too draining the contents of the bag. Types of term life insurance has no cash value. If at the expiration of the insurance contract the insured is still hale and hearty, the contract expires and no money is given to the insured.
Many people who do not like this product because no money is refunded when the contract expires and a fit and healthy customers. Strange indeed, there are people who are not grateful to have been blessed with health and longevity. The actual type of term life insurance is analogous to hire a security guard during the night to keep the house with treasures galore. If it does not happen robbed that night, whether we can pull back the salaries of security guards following morning? Should not we be grateful that our homes are safe?
Due to a large sum, to buy this type of insurance premiums is not too easy. Most insurance companies that sell this type of insurance customers require a medical examination first before buying a policy with pertangungan example of Rp 2 billion.
If it does not pass the inspection, customers are not allowed to buy this type of insurance. Or maybe just the sum insured is revealed to be smaller.
Whole life insurance (life)
This insurance contains the value of savings. The period of protection is no longer, up to 99 years. This insurance is called a refinement of term life insurance which has no cash value. You will recall that in the absence of a risk of death, at the end of the contract term insurance customers do not get anything?
Now, to satisfy customers who moan about term insurance, the whole life insurance, when the contract expires and the insured is still in good health, no cash value given. The risk, the premium paid is more expensive because of the risk of claims inevitable. Rarely is a healthy person until the age of 99 years, right? In Indonesia, the life expectancy of men 65 years and women 70 years.
The cash value of whole life policy can be used as collateral for loans and no bonus dividends of the company for a whole life policy holders. Moreover, if it can not pay the premium, the policyholder can take the cash value of these funds. This feature does not exist on the type of term life insurance.
The next question is, how much money will I get when the insurance period expires later? Usually the insurance agent provides an illustration at the age of few tens of years are going out of funds a few hundred million. Again, do not be dazzled by illustrations that show the numbers in the millions. That figure looks great at the moment, while inflation continues to erode the value of money and the time in the future, a few decades from now, the fund is actually not too big.
The reason, the fund was only developed with a yield of 4 percent per year. Much lower than the interest rate on the market. Yields of it still has not cut costs and taxes.
On the other hand, the real inflation rate reached 12 percent. So that whole life insurance cash value will be eroded by inflation and the value is not as big as when the illustration offered to prospective customers. Could be, when the policy matures, the cash value becomes very small.
The cost of premiums to be paid to obtain a sum of $ 1 billion, for example, will be much greater than the cost of premiums to be paid if you buy term insurance. How is it different, can be seen in the article concerning the calculation of insurance premiums.
Endowment insurance (endowment)
This type of term insurance is as well as savings.
This product is very popular before the advent of unit-linked products. Diverse forms of endowment insurance. In addition to having a cash value, there are also funds expended in futures before the insurance contract expires. These funds come out periodically eg 3 years or 5 years. For example, as insurance education who are spending when the child was 5 years old for kindergarten entrance fee, 7 years old to enter elementary school fees and so on.
Unfortunately, endowment insurance premiums are much more expensive than term insurance premiums as well as whole life.
Later, the prestige of this type of insurance endowment faded with the rise of unit-linked products. Moreover, because the royal bonuses, endowment insurance cost burden is precisely the insurance companies.