12 Important Reasons Why Someone Needs Life Insurance - Ratinah

Life insurance - is insurance that aims to cover people against unexpected losses such as the risk of death. This life insurance will then be borne by the insurance company as the insurer against the insurance policy holder.

12 Important Reasons Why Someone Needs Life Insurance - Ratinah

Insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be life insurance. It provides for the dependants after your death.

Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse. 

Financial obligations could include funeral expenses, unsettled medical bills, mortgages, business commitments, meeting the college expenses of the children, and so on. 

Why do you need to have life insurance?

Financial Risk Protection

One of the protections against financial loss of income for the family. A life insurance policy is important so that your family can be insured for life after you leave.

Future Savings

One way to save for the future. For some people who buy life insurance, saving in life insurance is another alternative option to meet their long-term needs. Please note that due to the nature of premium payments that are regular, mandatory, and not easy to take at any time.

Death Risk Protection

Protection against the risk of death due to the main causes of death. There are several main causes of death such as vascular disorders, respiratory diseases, coronary heart disease, traffic accidents, and several other diseases. Generally this often happens in Indonesia. Therefore it is important for you to have life insurance so that you get protection against the risks that cause death.

How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income.   It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.

As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.

1. Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.

2. It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.

3. Life insurance can have a savings or pension component that provides for you during retirement.

4. Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.

5. Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan.

6. In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.

7. Life insurance can be planned such that it will cover even your funeral expenses.

8. Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.

9. Insurance protects your business from financial loss or any liabilities in case a business partner dies.

10. It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.

11. Savings for Old Age, Having a quiet, happy, and financially secure old age is of course the dream of many people. Therefore, having insurance is one of the keys for you to achieve that dream. When you choose to use insurance, of course you will be charged to pay a premium. Well, you can think of this premium payment as savings.

However, what if you do not experience a loss while using insurance? Don't worry, you will get a guaranteed return at the end of the contract. Thus, having insurance can give you a sense of security both when you are experiencing financial difficulties and provide comfort for your life in old age.

12. Owning a Protected Business In addition to health insurance, life insurance, and investment insurance, business insurance is also an option for those of you who want to have insurance, especially for business people. As a businessman, of course you will as much as possible protect the business assets that you have.

Why is insurance so needed by companies? In business activities, risk is unavoidable. These risks can be in the form of fire, theft, disasters, and so on. In addition to covering losses caused by these risks, business insurance can also cover employees and their families if something happens to you.

With insurance, you don't have to always worry about financial risks so you can take your business activities seriously.

Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.

Types of Life Insurance

  • Term life insurance. This insurance provides protection for a certain period of time.
  • Life insurance for life. You will get protection for life. In other words, it can also be used as a long-term savings idea.
  • Unit-linked life insurance. This can be your alternative choice to have insurance and investment combined.
  • Dual life insurance. You will be offered insurance and savings packages for a certain period of time.

You need to know, each type of life insurance has its advantages and disadvantages. Therefore, adjust it according to your needs. So that you don't regret it in the future.

That's 12 Important Reasons Why Someone Needs Life Insurance - Ratinah

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