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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Calculation Method

Calculation method sum assured there are many things, but in general we divide into 3 (three) groups of calculation methods, namely:

1. Metode Human Life Value: in this method the absolute sum assured is calculated based on monthly income multiplied by the time the funds available to sustain life, regardless of interest or growth factor if the sum assured funds held in banking products.

2. Income Based: This method calculates sum assured by calculating the amount of interest or return if the insurance money received is stored in banking products.

3. Needs Based Financial: large sum assured has a range of at least equal to the amount of money given the current needs (present value) multiplied by 150%. Meanwhile, the maximum sum assured is the future of money (future value) multiplied by 80%.

This method is absolutely combined with the investments made (either monthly or yearly) to reach the financial needs of the future (future value) of such financial needs. This method can also be used for those who already have a monthly income that is so great that the two other methods mentioned above can not be used anymore because it will give the amount of insurance money that is too large (unlikely to be approved by the insurance money insurance companies).

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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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