Insurance is one way to prevent the risks that arise in your life. Starting from health, from education to soul. However, when you are insured, it is your duty as a customer to pay the premium.
Each insurance policy has its own policy, depending on the insurance product selected. One of them is a life insurance product. Life insurance is a type of insurance that protects individuals and their families from financial loss due to the risk of death or life loss.
There are several variations of life insurance, including term life insurance, all life insurance, endowment insurance and unit link life insurance.
Risk of Delay in Payment of Insurance Premiums
The premium is the amount that the insured must pay each month in order to receive benefits for the undesired conditions for taking out insurance. The amount of insurance premiums to be enrolled was also decided by the previous insurance company in consideration of the circumstances of the insured.
Therefore, you need to pay insurance premiums on a regular basis. But have you ever been late in paying your insurance premiums? If so, you will probably face quite serious consequences.
The reason is that if the premium payment is delayed, the insurance may expire or no longer be applied, and the protection effect of the insurance may be lost.
For example, if you have expired health insurance, you will eventually have to spend your personal money on treatment costs if you are at health risk. Also, if you die, your family will not receive the guaranteed amount from insurance. Isn’t it deadly?
In general, to overcome this, you will have to pay late premiums and a fine (if any) for late payments of premiums. However, even if the policy is re-enabled, the policy will still be subject to a wait period, as per the policy provisions that apply to each product.
However, risks can also arise if you are unable to pay for inactive insurance policies. Of course, you don’t want to experience that right. In particular, life insurance products are in the midst of an uncertain pandemic like today, where life insurance products should be the answer to your worries.
Difference in Insurance Premium Payment Period
Please note that the insurance premium payment period varies depending on the life insurance product. The description is as follows:
1. Unit link life insurance
For this product, the premium payment period is lifetime. However, due to the investment allocation, if there is sufficient investment allocation in the 10th or 20th year, or to reduce insurance costs, etc., it is possible to stop paying insurance premiums using the insurance premium leave system. According to the protection / coverage you choose. If the cash value is not sufficient to pay the premium obligation, the insurer usually asks you to repay the premium or replenish it to continue protecting your insurance policy.
2. Whole life insurance
This product provides lifetime protection, so the payment period is lifetime. In addition to offering Sum Assured (UP), whole life insurance also offers the benefits of cash value. The cash value of whole life insurance is determined at the beginning of the insurance period.
3. Term life insurance
In contrast to whole life insurance products, term life insurance provides protection for a period of time, such as 5, 10, 15, 20, 25 years.
Not only that, term life insurance is not known for its cash value. Term life insurance provides benefits only in the form of UP and means that it can only be paid in the case of death benefits.
4. Dwiguna Life Insurance (donation)
This type of life insurance has two functions: term life insurance and savings. Of course, in the event of an urgent need, as a savings, the insured can cancel the insurance policy by following the applicable provisions.
Like whole life insurance, endowment insureds receive a large amount of cash, but of course the premiums paid are relatively higher than the whole life insurance mentioned above.
Now, from the above explanation, of course, you already understand how important it is to pay your premiums on time! Especially if you decide to take out insurance. So you already understand the importance of paying premiums on time, right? Don’t even prevent you from using the protection you should get.
If you’re still confused about insurance, you can talk to an authorized insurance agent.