4 Insurance that needs to be owned - In managing family finances, in addition to saving and investing, insurance is something that must not be forgotten. Insurance basically aims to protect ourselves and our families from financial losses. In formal language, insurance is part of risk management. But in everyday language the risk may be connoted as a disaster.
Disasters must be experienced by everyone, but when and how big is the disaster we cannot predict. Disasters can cause harm both morally and materially. Insurance is our way to reduce material losses that we must bear. There are at least 4 insurance that needs to be owned so that the financial condition of our family is not disturbed when we are hit by calamity.
1. Life Insurance
What will happen if we as parents who make a living to meet the needs of everyday life dies. Of course life and financial condition of the family will be disrupted. Life insurance provides protection from the risk of death due to illness or accident as well as the risk of loss of income due to permanent disability.
Today life insurance products vary greatly. However, we only recognize 3 types of life insurance offered by insurance companies.
Term Life Insurance ( Term Insurance ) , is insurance that provides protection for a certain period (eg 1 year, 5 years, 10 years) with a premium payment once or in installments every year. Insurance companies only pay Sum Insured if the insured dies when the policy is still in progress. But if the policy period has expired, and the insured is still alive, then the insurance company does not pay the Sum Insured.
Endowment Insurance ( Endowment Insurance ) , there are 2 components in this insurance, namely the soul protection component and the savings component. So, when the insured is still alive at the end of the policy period, the insured does not get the Sum Insured but still gets a sum of money from the savings component that has been paid in accordance with the agreed plan .
Unit Link Life Insurance , in addition to the protection component of this insurance there is also an investment component. Usually policyholders prioritize investment components rather than protection components. The insured will pay a number of premiums where part of the premium will be purchased by the insurance company investment unit in accordance with the plan that has been chosen. If the term of the policy ends and the policy holder is still alive, the investment unit will be converted into cash value. This type of insurance is in great demand because usually funds are invested in mutual funds that provide high returns. So that in addition to getting protection, policyholders also benefit from investment.The important thing in life insurance is to determine the amount of the Sum Insured or the money that will be paid by the insurance to the heir when the insured dies or at the end of the policy period.
Don't let us pay premiums more than the protection we need. The amount of Sum Insured can be calculated based on monthly income or it can also be calculated based on economic needs that must be met such as tuition fees, debts that are not protected by insurance and others.
2. Health Insurance
Looks like none of us have never been sick, and not infrequently when we are sick we have to pay a substantial medical expenses. For this reason we need to have health insurance that provides compensation due to illness in the form of drug costs, hospital fees and other costs contained in the policy.
What is important to note in health insurance is what costs are replaced, what costs are not replaced, and the cost of reimbursement.
So, the amount of premium paid determines the maximum amount of reimbursement of hospital expenses such as room type / room cost per day, maximum operating costs, and others. The greater the premium paid the greater the benefits received by the insured.
Costs that are reimbursed , usually include hospitalization costs (room costs, surgery, medical devices, laboratory tests, doctor's consultation, ambulance, and medicines). As an additional guarantee ( riders / cannot be purchased by themselves) usually replaced also costs for outpatient care (doctor and drug consultation) and the cost of giving birth. Costs that are not replaced , generally are the costs of illness caused by consuming alcoholic beverages, drugs, suicide, congenital defects, abortion, and others.At this time there are many insurance companies that offer additional guarantees (with the addition of premiums of course) for critical illnesses. Such as kidney disorders, stroke, cancer, and about 48 other critical illnesses.
At present the government has obliged every citizen to have health insurance through the National Health Insurance program and Healthy Indonesia Card.
3. Vehicle Insurance
Vehicle insurance can be more owned than life insurance. Why? because usually every purchase of a new vehicle with a credit scheme, automatically insured by the leasing or lender. In big cities with heavy traffic and high crime rates also requires that we have motor vehicle insurance.
The important thing to note from motor vehicle insurance is, what things are not replaced by the insurance if an accident or loss occurs.
There are two types of motor vehicle insurance, namely All Risk insurance and Total Loss Only . In All Risk vehicle insurance , insurance reimburses all losses ranging from minor damage (above the risk value itself) to losses due to loss of vehicle. But in the Total Loss Only insurance, the new insurance company provides compensation if damage reaches 75% or more than the insurance value or if our vehicle is lost.4. Fire Insurance
Maybe it is still rare for families who have fire insurance, especially families who live in housing that is neat so it feels less likely to fire. However, once again disaster can come unexpectedly or our estimates.
Especially if the house we live in is also a place for home-based businesses such as catering businesses , salons, or boutiques, it is very important to be protected by fire insurance.
As with other insurance, it is important to note what things are not replaced in fire insurance. It's good, when insuring a house from a fire we also add insurance to valuables that are in the house, especially if we also do business in the house we live in. These items must be declared in detail regarding the type, age and amount, so that in the event of a fire we can get a replacement that is commensurate with the loss that we experience.Thus, 4 insurance needs to be owned, so that our financial condition is protected from calamity that can befall us anytime. Let's Insurance for a more prosperous family.
