Choosing Life Insurance Products

In financial planning, a person faced with the necessity for protecting assets, and we all agreed that a very valuable asset and can not be precious with money is the life or soul of a human being.

Furthermore we can calculate the correct sum assured with the right life insurance? So if there is risk of death then we can leave a legacy of a decent sum assured to those who we leave behind.

Readers are wise, before we discuss the method of calculating life insurance sum assured, is useful to note that the basis for calculating the sum assured is based on the calculation of 'economic value' of the question.

Economic value mentioned is the amount of income or average income per month at present. So if someone has increased incomes for granted so much money added.

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Value-Based Income Method

Let us refer to the following case:

A 30-year old father has a monthly income of Rp 5.000.000, -. The father has a wife and a child aged 0 years (new born). The father wanted to send their children to the best universities in Indonesia.

He calculated the current tuition for 4 years already, including registration fees and the costs of teaching and learning, credits, etc. outside of books and transport costs is Rp 80,000,000, - (eight hundred million rupiahs), taking into account factors of education cost increases by 18% per year, for 18 years the cost had swelled to $ 1,573,860,075, - (one billion five hundred and seventy-three million eight hundred and sixty thousand seventy-five dollars).

To protect the family so much UP (sum assured) worth of life insurance for these fathers are for:

a. If using the Human Life Value method: the UP is Rp 600.000.000, - (six hundred million rupiahs), capable of sustaining a family life for a maximum of 10 years.

b. If using the Value-Based Income method: the UP was Rp 1,200,000,000, - (one billion two hundred million rupiahs), taking into account the interest rate of 5% per annum if the UP is stored in banking products, the result of an interest rate of Rp 5.000.000, -. Can be used to support family life.

c. If using a method based Value Financial Needs: the proper UP (on educational planning needs of the child) was Rp 120,000,000, - (one hundred twenty million dollars) to Rp 1,260,000,000, - (one billion two hundred sixty million dollars ).

Next is how the best way to choose life insurance product that best suits? In terms of product selection we will choose the most optimal product, in the above case we would need to know the range of premiums for each of the existing UP so that we get the best benefits of high However the UP with a minimum premium payment.

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Renewable Term

Here we want to chart the range of annual or monthly premiums in the example above case (for an Indonesian man with health conditions, high and normal weight):

Table for age 30, Premium range of information that we deliver on the range of traditional insurance premiums by type YRT (Yearly Renewable Term) with the addition of the premium each year (see example above table), our data were from life insurance companies in Indonesia, and has the type of life insurance products YRT.

This product is highly recommended to be done consistently until at least the child has entered college at the university.

Readers are wise, we once again wish to convey that to obtain optimal results above case should choose an insurance product that is not combined with an investment or unit known as the link because if no premium is paid (with the same UP) will be more expensive. This condition would lead to opportunities insurance protection with a big UP potentially fail continuously or in terms of insurance called a lapse.

So we decided to readers after big UP that best matches their needs and our capabilities, the next step is to do a separate investment with insurance so that the long-term growth will be better funding and ultimately financial goals will be achieved. Welcome to the smart financial planning, planning well living well, is entirely your decision.

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