What is on your mind when you hear the word "life insurance"? Recognized or not, most Indonesians are still not familiar with life insurance. Having life insurance is considered a waste of money for something that is not yet clear.
Is this view right? Not necessarily. The emergence of insurance products in the midst of the life of modern society, stems from the awareness of the various kinds of risks that surround human life from time. There is a risk of illness, the risk of accidents, the risk of losing property, the risk of death that is too fast, the risk of life too long, and so forth.
These risks affect our financial problems more or less when they occur. In fact, it is rather difficult to eliminate the risk altogether from our lives. But, that does not mean these risks cannot be managed. This is where the presence of insurance products becomes important.
In general, the definition of insurance that was successfully summarized by Halomoney is as follows:
Insurance is a scheme of transferring risks faced by a person to a third party, namely an insurance company. So, when these risks occur, financial losses that you can minimize.
Basically, insurance is divided into two groups. Namely life insurance (life general insurance) and general insurance (general insurance). Especially this time, let's discuss specifically about soul insurance first.
Definition of life insurance
Life insurance is an agreement contract between you as an insurance policy holder or the insured with the insurance company as the risk guarantor. Which, the insurance company as the risk guarantor will pay a sum of money when there is a risk of death to the insurance policy holder or the insured.
The money that must be paid by the insurance company or insurer is called the sum assured. As for the policy holder or insured, you must pay the premium as a fee for transferring the risk to the insurance company.
Simply put, life insurance bears financial losses when the insured or policy holder dies. If the insured dies, then who gets the financial benefits of life insurance? Those who get it are the heirs of the insured.
Also to remember, life insurance cannot prevent death. But, insurance can ease the financial burden of family members when the breadwinner dies.
Who needs to have life insurance?
If you are currently acting as a breadwinner or living a family life, having life insurance is highly recommended. Why? You can better manage financial risk by buying life insurance and minimizing financial shocks for your family when you suddenly die.