4 Things to watch out for when choosing insurance & bull; hello healthy

Insurance is one of the pillars of personal finance that every household should consider. It may even be vital for most families. However, even though there are so many choices of types and the ease of submitting an insurance application, there is still a lot of confusion, even doubt, about life insurance.

Maybe this is due to the complexity of the concept of life insurance, an explanation from the insurance officer himself, or just a subconscious tendency to avoid any topic that comes into contact with our deaths. However, if armed with the right information, you can simplify the decision-making process and arrive at the choice that is best for you and your family.

Guide to choosing the right life insurance

To help you out, here are 4 things you need to know before you start hunting for life insurance.

1. Understand why you are applying for insurance

Life insurance is designed to provide families with financial security after the death of a spouse or parent. In addition, life insurance can provide peace of mind for policyholders. Life insurance coverage can help pay for home or property installments, tuition fees, pay for retirement, finance inheritance, and are key to housing planning.

That is why life insurance is so important for children from families with a single source of income, but it will also be important for spouses who are not working.

If you are responsible for other people financially, you need life insurance. It is almost compulsory if you have a married spouse or parents with children who are still dependent on your finances. But you may also need life insurance if you are a divorced spouse, the child of a dependent parent, a sibling of a dependent adult, an employee, a business owner, or a business partner.

If you retire financially stable or financially independent, and neither party will experience financial difficulties if you die, then you don't need life insurance. After all, you might consider applying for life insurance as a strategic financial tool.

2. Determine the amount of cost coverage you will need

The amount of money your family or heir will receive after your death is known as a Death Benefit claim. To put it simply, to determine a rough estimate of your much of your Death Benefit by multiplying your eight annual salary.

Alternatively, you can multiply your annual income by the number of years remaining before your retirement benefits begin to be harvested.

A more detailed method is to add an estimate of the monthly family expenses you will need after your death. Don't forget to include a one-time death processing fee and ongoing costs, such as children's school fees or home loans. Take the total continuous cost and divide by 0.07. This means that you will want to earn around 7% annually to cover these ongoing costs. Add that result to the amount of money you need to cover your one-time expenses, and you will get a rough estimate of how much you will need for life insurance.

The thing to remember, a rough calculation like this is just a shadow. Using this estimate, however, will help a lot when you are required to have a discussion with a professional insurance agent in the real world.

3. Determine the right policy

Once you know how much coverage you will need, you can start thinking about the best type of insurance policy to meet your needs.

A policy is a contract between the life insurance company and the applicant (or sometimes an object, such as a trust fund) that has a financial interest in the life and welfare of another person. The insurance company will collect premiums from policyholders and pay claims after your death. The difference between the premiums saved and those paid for claims is the company's profit.

There are two policy options: term life insurance or permanent life insurance. The difference:

• Term life, aka term insurance, is the simplest and most commonly found. The soul company designs a premium policy based on the probability that the Insured (you as the premium payer) will die within a certain period of time, based on a medical examination - generally 10, 20, or 30 years. The premium is guaranteed for the entire period chosen, after which the policy cost becomes too high to maintain or you let it go away. This means that you are very likely to pay premiums for decades and not earn any benefits. The good news, it means that you are still fine and have defeated the "destiny" of the death sentence determined by the company.
• Permanent life insurance, is designed to use the same time of death calculation as term life insurance, but also includes a savings mechanism. This mechanism, often referred to as "cash value", is designed to help policies last.

Apart from term and permanent life, there are many other types of policies on the market. It is recommended that you explore the many options before starting to settle down.

4. Wisely choose an insurance company

You want to make sure you choose an insurance company that can support you stably, and who will invest your premium wisely to pay claims from policyholders. It's a good idea to thoroughly research and compare all the perks and advantages of your choice of insurance company, for example Accidental Death & Dismemberment Benefit (AADB, additional insurance that will provide compensation if the insured party has a fatal accident that causes death, or serious disabling injuries - such as burns or loss of organ / limb function due to an accident).

Alternatively, you can consult a financial consultant who can help consider all your financial factors, your needs, and the needs of your family.

Tips for choosing health insurance

Not only life insurance, health insurance will be just as important when we really need it. Without health insurance, you may not have access to many non-emergency medical services. Also, in an emergency situation, such as a traffic accident, without the support of health insurance, you can be trapped deep in the pile of debt - medical bills are the biggest cause of bankruptcy.

Taking into account the four points above, below are some things you need to know before applying for health insurance.

1. Office facility health insurance may not be sufficient

Health insurance facilities provided by the company where you work are legally mandatory. In fact, by joining together with a group planning like this, you can minimize the costs you have to pay or become completely free. This group planning insurance will also be very useful for those of you who have fluctuating health or have certain diseases.

However, if you are required to pay for insurance and you are in good health, you should withdraw from group insurance and apply for yourself independently, outside the office's discretion. The reason is that group insurance bases premiums on the average health of the group members, so you can look for insurance plans that are more cost effective or have more benefits for the same price if your health is good.

2. Research the coverage offered

There are some doctors who are not covered by health insurance coverage. So are the benefits of medical services.

This is especially true for certain medications, alternative practices such as chiropractic, and miscellaneous costs, such as costs for childbirth and cosmetic procedures. Keep in mind that if you don't plan to have children now, you may not be able to add additional submission cover fees if you change your mind later. It is recommended that you list the prescription drugs you are currently using and additional “other” services to ensure that they are covered by your health insurance policy.

Also pay attention to the terms and conditions, as well as limitations and exclusions, of your life insurance and health insurance to get the optimal benefits for you and your family.