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Insurance is a term used to refer to an action, system, or business where financial protection (or financial compensation) for the soul, property, health and so forth get a replacement from unpredictable events that can occur such as death, loss , damage or illness, which involves paying premiums regularly within a certain period of time instead of a policy that guarantees such protection.

The term “insured” usually refers to everything that gets protection.

Basic Insurance Principles

In the insurance world there are 6 basic principles that must be met, namely:

• Insurable interest, namely the right to insure, arising from a financial relationship, between the insured and the insured and legally recognized.

• Utmost good faith, which is an action to disclose accurately and completely, all material (material fact) facts about something that will be insured whether requested or not. The meaning is: the insurer must honestly explain clearly everything about the extent of the terms / conditions of insurance and the insured must also provide clear and correct information on the object or interest insured.

• Proximate cause, which is an active, efficient cause that causes a chain of events that results in an effect without the intervention of one who starts and actively from new and independent sources.

• Indemnity, which is a mechanism by which the insurer provides financial compensation in an effort to place the insured in the financial position he had just before the loss occurred (KUHD article 252, 253 and affirmed in article 278).

• Subrogation, namely the transfer of claim rights from the insured to the insurer after the claim is paid.

• Contribution, which is the right of the guarantor to invite other guarantor who both bear, but do not have the same obligation to the insured to participate in providing indemnity.

Type of Insurance

1. Life Insurance

This type of insurance is known to provide financial benefits to the insured for his death. The payment system for this type of life insurance varies. There are insurance companies that provide payment after death and others can allow the insured to claim funds before his death.

Life insurance can be purchased for self-interest and on behalf of the insured alone or purchased for the benefit of a third person. Even life insurance is also known to be bought in other people’s lives. As an illustration, suppose a husband can buy life insurance that will provide benefits to him after the wife’s death. Parents can also insure themselves against the child’s death.

2. Health Insurance

This type of insurance is also quite well known by the people of Indonesia. Health insurance is an insurance product that handles the health problems of the insured because of an illness and covers the cost of the treatment process. Generally, the cause of the insured’s illness which can be borne by the insurance company is injury, disability, illness, until death due to accident.

Health insurance is also known to be bought for the benefit of the insured or the interests of a third person. Private health insurance companies such as Prudential, Allianz, AIA, Cigna, and Manulife are among the big names that provide a variety of insurance products to suit the needs of the Indonesian people and are widespread throughout the world.

3. Vehicle Insurance

The most popular vehicle insurance in Indonesia is a type of car insurance that focuses on injury coverage to other people or against damage to other people’s vehicles caused by the insured. This insurance can also pay for the loss or damage to the insured motor vehicle.

Vehicle insurance is one of the general insurance products. This type of insurance had become a boom when the riots broke out in May 1998 because the incident made people’s interest in protection ownership for private vehicles increase dramatically.

The financial site has partnered with well-known insurance companies in Indonesia so you as a customer can compare the best car insurance products with low rates.

4. Education insurance

Dizziness with children’s education costs? This type of insurance will help you overcome. Education insurance is the best alternative and a solution to ensure a better life, especially in children’s education assets. The cost of the premium that must be paid by the insured to the insurance company varies according to the level of education to be obtained later. Understanding the importance of using education insurance for children is now a matter of concern for parents. The high cost of education and other conditions that exacerbate the economy such as the weakening of our currency against the US dollar affect the cost of education for children later. Realizing that this clearly will burden parents, it is not uncommon for parents now to choose to have education insurance. So, education insurance can be classified as the types of priority insurance too, right? You will certainly be helped in taking care of the child’s future.

5. Travel insurance

Maybe for those of you who often travel or travel are familiar with this type of insurance. The various types of insurance also create a variety of protection for travelers. Overall, the function of travel insurance is not much different from the ordinary insurance function as a form of protection for customers with a short period of time that is for the premium buyer to travel until returning home. Benefits and protection that will be gained from having travel insurance include obtaining protection and coverage for accidents that affect premium buyers, personal accident benefits, dependents for emergency medical expenses, repatriation of bodies, medical evacuation, to protection of luggage that has a risk of being lost. or damaged.

6. Business insurance

For those of you who have a business field, this type of insurance is important to consider. In addition to the types of insurance that involve individual protection, insurance that protects businesses is also needed. Business insurance is a protection service against damage, loss and loss in a large amount that may occur in one’s business. This insurance provides compensation for damage caused by fire, explosion, earthquake, lightning, flood, hurricane, rain, collision, until riots. Insurance companies usually offer a variety of benefits from business insurance such as protection of employees as business assets, investment and business protection, comprehensive life insurance for all employees, to health insurance protection packages for employees.

Advantages of Insurance Companies

Insurance companies also benefit from investment. This is obtained from the investment premium received until they have to pay the claim. This money is called “float”
Insurers can get profit or loss from float price changes and also interest rates or dividends in float. In the United States, property losses and deaths recorded by insurance companies were US $ 142.3 billion in the five years ended 2003. But total profits in the same period were US $ 68.4 billion, as a result of the float.

Insurance Refusal

Some people consider insurance to be a form of betting that applies during the policy period. The insurance company bet that the buyer’s property will not be lost when the buyer pays the money. The difference in fees paid to insurance companies against the amount they can receive if an accident occurs is almost the same as if someone bet on horse racing (for example, 10 to 1). For this reason, some religious groups including the Amish avoid insurance and depend on the support received by their community when disaster occurs. In communities where close and supportive relationships where people can help each other to rebuild lost property, this plan can work. Most people cannot effectively support the system as above and this system will not work for big risks.

Should I buy whole life insurance or term insurance? Well that’s an odd question. Why? Because when it comes to whole life vs term insurance there really isn’t …

Post Author: admin

17 Replies to “Should I Buy Whole Life Insurance? – Whole Life Vs Term – Is Whole Life Insurance Bad or Good? | My Insurances Info”

  1. You keeping on saying most people "drop" their term insurance. I think most term policies "expire." When I'm 60, my house will be paid off and no kids in the house. Why would my wife need anymore money than our retirement savings? The reason why wealthy people buy more whole life insurance is for tax reasons. A product that's good for wealthy people is horrible for the middle class. So back to your questions. I would not have to cancel my homeowners insurance if I see that tornado coming. Because I let it "expire" 10 years ago, and I can just go live at my lake house (because I was able to invest what I saved) for the rest of my retirement.

  2. Sir I've heard you talk about gaining over 3%, but it is my understanding that Whole Life plans cash flow relies on dividends as the payment.  Most dividends fall into the 2%-4% range.  Is there something I'm missing here ?  I think annuities make since as a hedge against just holding blue-chip dividend stocks in long term bear markets or corrections.  I just don't see how Whole Life provides more cash flow than an annuity.

  3. The returns are bad…like less than 0% after fees when taking money out of Whole life Insurance. Then you lose the life benefit once you take money out. So there is no gain…so the tax free comment is simply a sales pitch. Remember if it were so good, how could an insurance company make money if it was that good of an investment. Well also the premiums are 20 x term insurance. Don't believe this slim ball on video. He is brainwashed and makes a lot of money selling Whole life insurance.

  4. First of all I want to say this is a fantastic video,

    It really points out the benefit of permanent life insurance. One thing I've found with a lot of videos on youtube is that they'll either be completely pro whole life or completely pro-term life. I really appreciate that you indicate that term life does have a specific purpose that some people should look into.

    As a life insurance agent, I believe that everyone's situation is different and that not everyone needs the same insurance policy. However, AS LONG AS IT IS AFFORDABLE, everyone should get some sort of whole life coverage, because it is important to have a tax-free benefit that pays for final expenses.

    However, I'm not a huge advocate of cashing out the whole life policy early, mostly because the face amount will higher then what the cash surrender value would be.

    But overall, Great job Dan. I appreciate your advice and plan on showing this video to my fellow life insurance agents and potential clients

  5. You begin your video by comparing cancelling home owner’s insurance before a tornado to someone cancelling their Term life Insurance Policy prior to death.  I hope you truly don’t believe the two are equivalent.

    When you use an over-simplified example of cancelling insurance before a tornado, you only feed into the skepticism of Whole Life Policies.
    A Whole Life Insurance Policy is a combination of two distinctly different financial products.
    In very simple terms:
    Insurance – A contract to protect against the possibility of a future unforeseen loss. Investment – The allocation of Capital in order to gain a profitable return

    The companies (and individuals) who sell Whole Life Insurance Policies would like you to believe you cannot achieve the same level of financial success if you uncouple the two products (i.e. buying Term Insurance and investing the difference would not yield a better result).  I beg to differ.
    Your quote:
    “Term Insurance is essentially renting death benefit”
    Yes Dan that is correct, in fact most conventional forms of insurance can be construed as “renting” a particular benefit.

    “Every year you pay rent, but the day you stop paying rent, it’s over. You have nothing to show for it, all that money is wasted”.

    WHAT???  So by your logic if I pay homeowner's insurance for 40 years and my house never burns down then “all that money is wasted”.  Seriously??  It’s called purchasing protection for unforeseen loss.  If I never have a loss, I’ve hardly “wasted” my money.

    The coupling of Insurance and Investment through the vehicle of a Whole Life Insurance Policy is an enormous money-maker for the companies and individual sales people who sell these policies.You can achieve the same and BETTER results by utilizing other investment and insurance options but that's something a Whole Life Salesman will never tell you.

  6. How can the cash value of a whole life increase as fast as possible? Does it mean that in order to do that the death benefit has to be low? I'm not concern about the death benefit being high.

  7. I've heard that if you have whole life and you die, you keep the death benefit, but the company takes your savings. Whereas, if you have term and a mutual fund and you die, your beneficiaries get both the death benefit, and the mutual fund savings. Is that true?

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