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Definition of Life Insurance and its Benefits

Definition of Life Insurance and its Benefits
Definition of Life Insurance and its Benefits

Life insurance is a type of service or insurance product in which the object being insured is protection against a person's life or death. The focus of the dependents provided by life insurance is compensation in the form of cash to the heirs due to the loss of life as the backbone of the family.

So, what is the definition of life insurance?

Understanding life insurance can be concluded as a form of insurance dependents to compensate financially due to the loss of a source of family income which is usually produced by someone who earns a living. So, the life or life that is insured is the soul of someone who is the backbone.

Life Insurance Benefits

Each type of insurance has a different insurance principle. The benefits of life insurance are of course very diverse. The function of the insurance may vary based on the type of life insurance product selected. Life insurance benefits can be classified based on the types that exist in insurance products which consist of the following:

1. Term Life Insurance

In this type of term insurance, the protection of the life that is the object of insurance has a certain period of time. In general, the period that applies to this type of term is from 5 to 30 years of dependents.

Where within a minimum period of 5 to a maximum of 30 years, the heirs are continuously entitled to receive dependent funds since the insurance customer dies.

2. Life Insurance or Whole Life Insurance

This type of life insurance provides protection services to customers without age limit. So, the customer's lifetime will be protected by this insurance. Even when the customer's age has reached 1 century, life insurance remains valid without being burned at all.

The advantage of this type of lifetime is that insurance dependents provide pension fund services so that customers who use this product can be guaranteed in preparing for their needs in retirement or old age.

3. Life Insurance and Investment

This investment insurance category is quite unique, usually referred to as unit link insurance. In addition to life that can be protected and guaranteed by insurance companies, customers can also invest at once. Insurance premiums are paid not only as a form of protection contribution but there is also a portion for investment in the form of assets.

4. Dwiguna Life Insurance

Finally, the insurance benefits of this dual-purpose type are often known as endowment insurance. The products offered by dwiguna are not that far from the type of unit link. The difference is, unit link offers investment, and dual purpose offers additional benefits in the form of savings.

The premium paid by the customer is used as a contribution to the insurance protection policy and a percentage is included in the savings of the heirs.