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How to Choose the Right Life Insurance?

 Choosing Life Insurance. Insurance is often underestimated by the people of Indonesia. If you try to compare, out of 10 Indonesians, maybe only 2-3 people have insurance. This can not be separated from the lack of public awareness of the importance of having insurance, especially life insurance.


How to choose life insurance


 Have you ever thought about how important insurance is in our lives? Maybe you will think, right now you don't really need it. But we never know what will happen in the future, right?



One of the insurances needed is life insurance. What exactly is life insurance? Life insurance is a type of insurance that will provide protection to individuals and families from financial losses due to the risk of death, disability for life, until they are no longer productive.


Life insurance is like the saying "Prepare an umbrella before it rains". So, before an unwanted risk occurs, you have to be on guard beforehand. That way, your life can be calmer because you already have protection. Family finances can also be more stable because of the sum assured if you die.


When you choose the best life insurance, how can you choose the right insurance? then there are several steps that you need to pay attention to in choosing the right life insurance so that later you don't make a mistake, here are the steps you must understand.


1. Get to know life insurance products


Your first step is to identify the insurance product. You need to know that there are four types of the best life insurance in Indonesia, namely:


- Term life insurance


Term life insurance, also known as term life insurance, is life insurance that provides protection for you within a certain period of time. Usually the contract period offered ranges from 5, 10, to 20 years with a fixed premium.


- Life insurance for life


Whole life insurance is life insurance that will provide protection for the rest of your life or until you reach the maximum age of 100 years. The premiums paid are somewhat higher than term life insurance.


- Dual life insurance


Very true to its name, this dual-purpose life insurance is multi-functional in which this insurance has two benefits for its users, first term life insurance and secondly savings. Then later, there will be a sum assured if the insured dies and you can also withdraw the policy within a certain period of time before the contract period ends. This type of best life insurance is more in demand by the public.


- Unit link life insurance


While dual-purpose life insurance offers insurance and savings, unit-linked life insurance offers insurance and investment in it. Actually, the premiums offered are not much different from the three other best types of life insurance, it's just that the sum insured is the lowest. This insurance is actually not uncommon, because it combines with investment so that insurance premiums or contributions are quite expensive compared to pure life insurance or pure investment.


2. Adjust premiums with financial capabilities kemampuan


Premiums are the budget you have to spend every month to pay for insurance. Premium payments can be made monthly, quarterly or quarterly, six months or semi-annually, or annually.


To be sure, you have to adjust the premium amount to your monthly budget. More precisely, the allocation of funds to pay for the best life insurance starts from 10-20 percent of the total monthly income. So, if your monthly income reaches IDR 10 million, then you can take a maximum premium of IDR 1 million per month.


3. Know the amount of the sum insured


His name is also life insurance, there will definitely be a sum insured that will be given. This is the amount the insurance company will pay you or your heirs. The amount of this sum assured is closely related to the premium paid. The higher the premium paid, the higher the sum insured given.


But there are also high premiums, but the sum insured is very small. This usually happens because the benefits of premium money are divided into two, namely for savings or investments such as the type of dual-purpose life insurance and unit-linked life insurance.


4. Pay attention to the track record of the insurance company


Now is the time for you to be more selective in choosing an insurance company. When choosing an insurance company, choose one that has high credibility. As for this, you can see from the track record of the insurance company. Have any specific awards been awarded over the past few years? The existence of an award can be a positive value if the life insurance company

ut has a good track record in the eyes of the public.


In addition, the best life insurance companies in Indonesia are also supervised by the OJK (Financial Services Authority) and have a minimum level of risk-based capital or RBC (Risk Based Capital) that is in accordance with the provisions. Choose an insurance company that has a high RBC above the minimum requirement.


For example, an insurance company must have an RBC of 120 percent. If the insurance company already has a 300 percent RBC, then the funds and assets owned by the insurance company are strong enough to three times the required conditions. There is an RBC that reaches 300 percent, meaning that the insurance company is able to pay claims three times as large if the insurance has to pay claims to all customers at one time.


5. Make sure the life insurance agent is licensed


Not all agents who offer you insurance are official agents of life insurance companies. There are agents who only act as brokers or intermediaries. So before buying the best life insurance, make sure first that the insurance agent that offers you is an agent who has an AAJI (Indonesian Life Insurance Association) license.


The best life insurance agents who have an AAJI license can be responsible for helping you when there are administrative problems or problems when making a claim.


6. Choose the one with the best service


Did you know that a good insurance company can also be seen in terms of the services provided. Always choose an insurance company that has 24-hour customer service so that later it can help you whenever needed, be it when you want to ask for certain information or when you want to make a claim. Not infrequently there are insurance companies that are blacklisted by the public because the claims service provided is very bad.


7. Compare with other insurance companies


Each insurance company has different advantages of the best life insurance products. Therefore, you also have to be smart and don't decide quickly in choosing the best life insurance.


You can see this comparison in terms of premiums, contract period, sum assured, to the benefits obtained. If necessary, you can ask an insurance agent to make an illustration first so that you can easily learn about the products offered.


8. Study the contents of the policy carefully


Sometimes when we fit in and feel okay to buy something, we often forget to double-check carefully about the items we are going to buy. This also applies when we buy the best life insurance. It's good you need to avoid this attitude because insurance has a fairly long contract period. It is important for you to continue to study the contents of the policy that has been provided by the insurance agent.


Pay attention to every detail of the points listed, especially the points about the best life insurance claim provisions. If there are things that are not understood, then you should immediately ask the insurance agent who offered you.


9. Sign up when you're young


Generally, insurance companies set minimum and maximum requirements or criteria for a certain age, be it for health insurance or life insurance. This is because young people have a lower risk than old people. So don't be surprised if for ages under 30 the premiums offered will be cheaper than life insurance premiums for ages over 30 years and so on.


As you get older, the higher the premium you have to pay later. So it's better to register while you are young. This insurance premium is flat in other words the range remains the same throughout the contract period. So if you register when you are 25 years old with a contract period of 10 years, then for 10 years the premium remains the same and does not change at all.


Those are the nine important things that beginners must know in choosing the right insurance

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