Choosing the right insurance product

As might be expected, the most appropriate insurance product is not a link unit or other insurance that has a value of investments. With unit link, customers get lifetime protection, although of course, almost everyone does not need life insurance protection throughout his life. On the unit link, the customer must still pay the insurance premium even when the concerned do not need it at all.

The second reason is the same as the reason in my previous posts. Administrative costs and agent commission on a link unit is too large. In the first years following the link unit, practically wiped out customer funds to pay the agent commission. In addition, there are other administrative costs are no less magnitude, and are usually prospective customers do not realize it at the first unit of insurance following the link.

So the life insurance product which is right? The most appropriate products are term life insurance. Term life insurance is pure insurance products, no-frills investment. If the insured dies during a dependent, then the left will get the sum assured. If the insured is still alive at the end of coverage period, then the premiums will not go back.

The characteristics of term life insurance are as follows: 

There is no investment element or for the results (except perhaps the Islamic insurance) 

the length of coverage period is relatively short and not for life. Usually sold in units of 1, 3, 5 or 10 years.

At the end of coverage period, the customer has the option to renew contracts with large premium increases in accordance with the provisions stated in the policy.

Price premiums are relatively cheap. Market today for about 30 years of age and no smoking is approximately $ 300 thousand / year for the sum of Rp 100 million.

Almost never offered as an insurance agent commissions they get much smaller than if they sell unit-linked products. Customer must ask for specifics, or even come to your own insurance company office.