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3 Types of Life Insurance and the Benefits

3 Types of Life Insurance and the Benefits

Credit [Photo by Timon Studler on Unsplash ]

  • Updated on 15 Aug 2023
  • Redaksi Liveaman
  • Mins

Life insurance is a form of financial protection designed to provide benefits to heirs or other beneficiaries after the death of a policyholder. This insurance has an important role in maintaining the financial stability of the family left behind, especially if the policyholder is the backbone of the family or has significant financial dependents.

Also read 3 Types of Insurance Payments

What Is Life Insurance?

Life insurance is a contract between a policyholder and an insurance company, whereby the policyholder pays a certain premium in exchange for a guaranteed death benefit that will be passed on to their heirs if the policyholder dies. This death benefit can help heirs to pay debts, living expenses, educate children, or prepare for their future.

Types of Life Insurance

  1. Term Life Insurance
    This term insurance provides protection for a certain period of time, such as 10, 20, or 30 years. If the policyholder dies during the protection period, the death benefit will be paid to the heirs. However, if the policyholder is still alive after the coverage period, no benefits will be paid unless there is an additional clause covering premium return.
  2. Lifetime Life Insurance
    Whole life insurance, also known as whole life insurance, provides coverage for life as long as the premium is paid. Death benefits will be paid to beneficiaries regardless of when the policyholder dies. In addition, whole life insurance often has a cash value that can be withdrawn or used as an investment.
  3. Unit Link Life Insurance
    Unit linked life insurance is a combination of life insurance and investment. Part of the premium paid is used to pay for death benefits, while the rest is invested in a choice of investment funds offered by insurance companies. Policyholders can choose to allocate their funds into various investment instruments, such as stocks, bonds or money markets.

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Employee Benefits and Group Health Insurance

In addition to death protection, life insurance can also provide other benefits to employees in the form of group health insurance. Group health insurance is an insurance scheme provided by companies to their employees, which covers various health benefits such as medical treatment costs, hospitalization, medicines, and health checks.

In this case, employee benefits include access to affordable health care and financial protection from unforeseen medical expenses. In addition, group health insurance often has lower premiums than individual health insurance because the risk is shared among the group members.

Tips for Choosing the Best Life Insurance

  1. Determine protection needs: Consider the amount of benefits needed to meet financial dependents and maintain the lifestyle desired by heirs.
  2. Research the different types of life insurance: Understand the differences between term, whole life, and unit linked life insurance, and the benefits and risks of each.
  3. Evaluate the reputation of the insurance company: Choose a trusted insurance company with a good reputation for paying claims fairly and on time.
  4. Compare premiums: Comparing premiums from different insurance companies helps in finding the combination of protection and price that best suits your needs and budget.
  5. Consult a financial professional: If you are confused or need further advice, consult an experienced insurance agent or financial advisor to help you choose the right life insurance.

Top 10 Life Insurance in Indonesia

The top ranking list for life insurance in Indonesia may change from time to time and depends on the criteria used in the assessment. Therefore, it is advisable to seek the latest information from insurance rating agencies or do your own research considering the company’s reputation, products, customer service, and user reviews before deciding on the best life insurance for you.

Does BPJS Include Life Insurance?

The BPJS (Social Security Administration Agency) in Indonesia provides a social security program that includes health insurance, not life insurance. BPJS Health is a program designed to provide health protection and medical care costs to participants in the form of health facilities appointed by BPJS. Therefore, if you are looking for life protection, you should consider life insurance from an insurance company that provides the product.

In conclusion, life insurance has an important role in providing financial protection for the heirs or beneficiaries after the death of the policyholder. In choosing life insurance, it is important to understand the different types of insurance available, evaluate your protection needs, and do research on the reputation of the insurance company. By choosing the right life insurance, you can have peace of mind and protect your family’s finances in the future.

Also read Data Privacy and Security in the Health and Insurance Industry

Aman is a digital platform for employee benefits, where you can choose, buy, and manage health insurance in the form of benefits registration, claims monitoring, and analytical reporting. There are various examples of health insurance and Aman service products that you can use, for example AmanCheck, to anticipate the prevention of various disease and diagnostic risks.

Get more complete information by visiting the help page on our website or consult directly via WhatsApp. Come on, take care of your health and your family together with Aman!

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