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For this article, I will discuss as the title we present above, for the subject this time it is included in the category Insurance Companies / Life Insurance , because each of our discussions is grouped with their respective sub.
Is buying life insurance including one of your financial resolutions in 2018? If your current position is as the main breadwinner in the family, you should indeed have life insurance as a family financial risk management strategy.

Having life insurance can help you anticipate the financial risks that can arise as a result of the death of the breadwinner and due to other disasters that make the family income tap disrupted.

However, to buy life insurance also needs to be careful so as not to get caught in the purchase of inappropriate products. It often happens that someone buys life insurance, it turns out that it is not as needed so that when disbursed, the financial risks that are avoided still occur and shake the family's financial health.

For example the value of the sum insured is very small, not according to estimates. Or most of the premiums or contributions paid per month turned out to be cut quite large for certain reasons from the insurance company.

If you plan to buy life insurance, consider the following four major research mistakes so that you don't buy wrong:

1. Do not know the needs of the sum assured

Many people just buy life insurance without first calculating how much the actual sum insured he needs.

As a result, when there is a risk, the liquid sum assured is insufficient to cover the family's financial needs. Know first what your life insurance coverage needs are so that you can find the right product.

You can calculate how life insurance needs are calculated using the Human Life Value approach, with the formula of multiplying the current income value plus the risk free rate.

For example, your current income is IDR 10 million per month and your dependents will only be able to be independent for 20 years. Assume a risk free rate of 5.2 percent. So, the need for life insurance coverage is Rp 10 million x 12 months x (110 percent + 5.2 percent) x 20 years = Rp 1.42 billion.

After knowing the needs of the sum insured, you only need to look for life insurance products with the value of the sum insured. You can weigh a term life product or a pure term life insurance that the premium price is still affordable, with a large UP value.

2. Assume insurance as an investment

Regarding insurance, one thing you need to always remember is that insurance is a fee. Insurance is not an investment where you can expect big returns someday.

Conversely, insurance is a cost because in principle insurance is a scheme of transferring one's risk to third parties, namely insurance companies.

The insurance company will pay a certain amount of compensation or insurance when there is a risk to the insured or the policy holder.

Policyholders must pay premiums as a fee for transferring risk to the insurance company.

Life insurance cannot prevent death. However, life insurance can relieve the financial burden of family members left when the breadwinner dies.

Incorrectly consider insurance as an investment product can lead you to choose life insurance products that are less appropriate. Like buying life insurance combined with investment. As a result premiums are quite expensive, while the sum insured is relatively small. So, be smart in choosing the best.

3. One set the insured at the policy

In insurance, the insured is the person who is risked by the insurance company. So that, when the insured dies, the insurance company will pay the sum insured entitled to the designated heirs.

Who should be the insured ideally in life insurance products? In accordance with the purchase objectives, namely family financial risk management, insured life insurance should be those who have economic value or those who are a source of family income.

For example, husband, wife, or both. If the husband and wife both work, the insured should be the party who has the biggest income because the financial risk is also the biggest for the family if suddenly he dies.

4. Originally buying supporting insurance

Usually when you buy life insurance, insurance agents will also offer complementary insurance or rider . Do not just add additional insurance before calculating first what your needs are.

Additional insurance also means additional costs, so it's wise to add riders . If you need additional, for life insurance you can weigh to add it to waiver of premium or premium release.

Riders are useful for anticipating the risk of incompetence which results in you not being able to pay regular premiums. For example because of an accident that makes you lose your job, you will be released from payment of life insurance premiums.

Thus our article which we give the title: hopefully it can add to our knowledge in all categories. Insurance Companies / Life Insurance . Please come back and always follow our other articles which are of course very interesting and useful. Terimakasih

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