Jakarta, Armfalcon.com – One of the traditional life insurance products, has a premium refund feature if no claims are filed until the insurance period ends. Is life insurance like this the best choice?
This feature is generally found in term life insurance. This life insurance only provides protection benefits for a predetermined period of time, say 1, 5, 10, 20, or 30 years, that’s why they have a premium return feature.
Life insurance products like this are often referred to as ROP (return of premium) life insurance. This is quite interesting for customers, especially if the total premium that has been paid can return 100% or even more than that.
Before you buy this insurance, know the following things first.
Insurance like this tends to be more expensive premiums
The ROP feature is a sweetener to attract potential customers. Traditional life insurance that has an ROP feature tends to have premiums that are more expensive than life insurance that purely only provides protection.
This is because the expenses incurred in making this product are certainly greater than non-ROP life insurance.
The more expensive the premium, the greater your spending on this one thing.
Premium returns are not savings or investments
Let’s just say, you buy 100% ROP life insurance in the 10th year, and for 10 years you have spent IDR 150 million for the premium.
Will Rp. 150 million in 10 years’ time still taste the same as it does now? Remember that there is inflation.
If you still need life insurance protection for the next few years, then use the funds to extend protection or buy a new life insurance product.
The most important thing from life insurance is the amount of UP
In addition to ease of claim, it is very important to ensure that the amount of UP received is sufficient to cover all risks involved.
For example, a breadwinner buys life insurance with the hope that when he dies at a young age, the cost of education for his children is guaranteed to a high level and his family is no longer burdened financially.
The bigger the UP, the more expensive the premium. Therefore, at least when choosing life insurance, consider the UP first, not the other features.
You Only Live Once Bun… Better Have This Insurance