You cannot get life insurance benefits without paying a fee set by the insurance provider.
Protection seems familiar in this day and age. There are so many insurance products that you can choose from. If you are more interested in getting protection from life insurance, do you know how much life insurance costs you will have to pay in the future?
Insurance costs or better known as insurance premiums are an amount of funds that you have to pay within a certain period of time either monthly or annually according to the option you took when registering as an insurance participant.
However, you also have to know that insurance premiums are not the only costs you have to pay. This means that when you become a policyholder, you also have to spend funds to pay for various types of costs related to the insurance policy that you have.
For more details, Qoala will share information about life insurance costs, types of life insurance, tips on getting the cheapest life insurance costs, and recommendations for the best life insurance products.
Curious? Here comes the full description for you!
What Is Life Insurance?
Life insurance is the choice of many people who want to protect their beloved family from unwanted things such as the risk of death of the insured or policyholder.
In other words, we can conclude that life insurance is insurance that provides protection against the effects of financial loss when a person’s or family’s income is lost due to the risk of death of the insured. Or in short life insurance is a type of insurance that will cover a family or someone if the backbone of the family dies.
Every human being will indeed die, but the family left behind must continue to live on even with the various needs they have to pay for. So that loved ones don’t stumble into financial problems, especially if the insured is the only source of income, then life insurance is here to provide the best solution.
When the insured dies, the family left behind will get a sum of money as a result of life insurance which during his lifetime was paid by the insured. However, there is also life insurance that allows the insured to withdraw a certain amount of funds while he is still alive before the expiration of the insurance contract.
Life insurance is also required for those who wish to have a mortgage for several reasons. That is, if you want to own a house with a mortgage system, then you have to pay some money as life insurance which is a requirement and a mortgage. The function of KPR life insurance is the same as life insurance in general, namely to provide protection if the borrower dies before he is able to pay off the remaining mortgage installments he has taken.
That way, he will not leave debts to the family he left behind because this will increase their burden and cost of living, especially after the mortgage borrower leaves.
Overview of the Cost of Life Insurance
Before discussing the cost of life insurance that you have to pay per certain period, there are things that every prospective insurance participant must know. Generally, we know that insurance costs are insurance premiums. However, there are also other costs that will be the responsibility of the insurer, so they must be paid according to a predetermined amount.
These costs are:
- Cost of acquisition or risk management
- Insurance costs or premiums
- Investment management fees
- Fund withdrawal fees
- Fund transfer fees
- Policy cancellation fees
- Maintenance cost
- Additional insurance costs
- redemption fee
Cost of Life Insurance Per Month
Do you know that a person’s age determines the high and low cost of life insurance? If you have life insurance at a young age, it is likely to get cheap insurance and vice versa. But do you know how much life insurance costs you have to pay each month?
Actually, the cost or premium of life insurance is relative and differs from one product to another. The greater the benefits of coverage that you will get, the higher the cost of the insurance.
However, in the midst of competition in attracting potential customers and providing very affordable life protection solutions, you can even buy life insurance without having to spend a lot of money. There are life insurance products that you can buy with premiums starting from tens of thousands of rupiah per month.
If you want to try to calculate it yourself you can use the following method:
Total premium = premium rate x total sum insured
That is, the insurance premium that you have to pay is the product of the multiplication of the insurance premium rate and the total coverage price. For your information, the area of risk coverage and the type and nature of use of the insured property will determine the insurance premium rate that you will choose. While the sum insured is the value of each property that you insure.
However, if this method is too complicated to understand, the best way to find out how much life insurance costs per month is to contact an insurance provider or an authorized agent. So you will know how much money you have to prepare for premium payment needs every month within a certain period of time.
Cost of Life Insurance Per Year
Insurance providers usually offer insurance payment periods ranging from monthly to annual. If you feel that paying insurance premiums all at once every year is simpler without worrying about forgetting to pay for insurance, make sure that the insurance costs won’t be a burden. However, the cost of life insurance that you pay annually will be heavier than the cost that you pay monthly. Especially if you choose insurance that provides greater coverage benefits and start insurance at a no longer young age.
To calculate the cost of life insurance that will be your responsibility as the policy owner, you can ask for detailed information from the insurance provider, such as when visiting an insurance company branch office or an agent that offers life insurance.
Types of Life Insurance
The cost of life insurance is generally one of the considerations in choosing a life protection product. However, these costs depend on the type of life insurance that you will choose. Therefore, it would be better if you first get to know what types of life insurance can meet your needs and the protection you expect.
Here are several types of life insurance, one of which is suitable for the protection you want.
1. Term Life Insurance
Although in general the purpose of life insurance is the same, different types provide different protection benefits. Then what is term life insurance or term life insurance? This type of insurance serves to provide protection to the insured for a certain period of time. This type of life insurance contract is usually for 5, 10, or 20 years. However, the premium is cheap and fixed.
If you want to prioritize the future of your family, especially your children’s education, term life insurance can be the right choice. So even though your financial capabilities are limited, you will still get a lot of insurance benefits.
The benefits of this insurance are as follows:
- The policyholder has the right to determine the amount of premium according to conditions and financial capabilities.
- High sum insured.
2. Whole Life Insurance
Whole life insurance or whole life insurance is another type of life insurance that until now has been offered by various insurance providers. This insurance comes with lifetime protection according to the name of the insurance itself. However, insurance providers usually limit protection benefits, namely until the insured is 99 or 100 years old.
Who can choose this one life insurance? Everyone can actually buy this protection product with the condition that they can afford to pay life insurance costs so that benefits can still be obtained. If you want to get more than just death benefits and don’t have dependents, there’s nothing wrong with choosing whole life insurance.
In addition, you can use this insurance as an alternative to long-term savings, especially if you feel that setting aside money for savings is not easy because there are always unexpected expenses every month.
The advantages of whole life insurance include:
- Opportunity to get cash value from the premium that has been paid.
- If at a later date you cannot pay the premium that should be paid, you can use the premium that has been paid to pay the next premium.
- Premiums will not be forfeited if there are no claims.
- The insurance company will provide all sum assured at the end of the contract period.
3. Unit Link life insurance
Unit-linked insurance may be familiar to most people, especially those who already have unit-linked life insurance. This type of insurance provides a combination of benefits between insurance and investment. The cost of life insurance or insurance premiums that you pay will later be allocated to two fund management mechanisms, namely the basic premium for life protection and investment.
One of the advantages of choosing unit-linked life insurance is that the insured will get guaranteed protection as well as investment returns. Interested in choosing this insurance? If so, you can start looking for information on how much this life insurance costs and the estimated cash you can get from the investment.
4. Dual Purpose Life Insurance
If you don’t want to bother having to separate savings and insurance funds, why not choose dual-purpose life insurance? As the name implies, the insured or policyholder will get two benefits at once, namely term life insurance and savings.
That way, the insurance company will provide sum insured when the insured dies in accordance with the contents of the policy agreed by both parties. As with savings that can be withdrawn at any time, the insured can withdraw their insurance policy at a certain time if they need funds before the insurance contract period ends.
Then, what are the benefits of endowment life insurance?
- First, policyholders can withdraw insurance policy funds within a certain period of time even before the contract is completed.
- The insurance provider will provide sum assured of the total insurance if the contract period is over and the insured is still alive.
Tips for Getting the Cheapest and Best Life Insurance Fees
After knowing the cost of life insurance per month or per year, now is the time to choose the best life insurance product at an affordable price. If this is the first time or you are afraid to repeat the mistake in choosing a life insurance product, it’s a good idea to pocket some tips for getting the cheapest life insurance costs but being able to provide all the best benefits according to your wishes and needs.
Here are some tips that you should try to get the protection you want.
1. Use Pure Life Insurance
Pure life insurance is life insurance that only focuses on providing protection without any additional investment benefits. Usually, this insurance comes at a lower price when compared to unit linked insurance because there is no obligation to pay investment premiums. That way, you have the opportunity to get insurance at the lowest cost.
2. Buy life insurance products as early as possible
Like saving , buying insurance is also recommended as early as possible, especially if you want to get the cheapest life insurance costs. Why is that? Death knows no age, but as a person gets older, the risk of death increases, so the risk also increases. This will affect insurance costs where you have to pay higher insurance premiums.
From here we may begin to realize why parents have to pay higher premiums compared to the premiums paid by young people. If you protect yourself with insurance as early as possible, then protection can also be obtained earlier, right?
3. Choose the Lowest Minimum Premium
With so many choices of life insurance products on the market, how can you save money on life insurance costs? If you want to get the lowest insurance premium, try to pay attention to which product has a low minimum premium. Then, you can choose the insurance product if the benefits provided can meet the protection needs that you expect.
4. Avoid Taking Riders
Tempted to take a rider who will complement the benefits of the life insurance you bought? If you want to get the cheapest life insurance costs that won’t be a burden in the future, riders are something you should avoid. Why is that? Riders do offer additional features or services, but you also have to realize that choosing a rider means spending more money than the premium you normally pay.
5. Avoid Lifetime Life Insurance
Everyone has their own choice. This also applies when choosing life insurance, right? However, you shouldn’t make a hasty decision because there are several things to consider in order to get maximum protection benefits.
Lifetime life insurance is indeed attractive, but the premium you have to pay will be more expensive. The reason is because you will be protected longer and even up to 99 or 100 years old depending on the insurance company’s policy. So, you should avoid whole life insurance if you want to get the cheapest and best insurance premium .