Definition of Life Insurance

Definition of Life Insurance is to transfer the financial risk of a loss by the insured to the insurer. The risk of the insured to the insurer  risk for loss of life, but of a financial loss as a form of compensation for the loss of one's soul or because of the age of reason that is not productive.


The concept of Life Insurance risk seen from the economic value of a person's life to his family and how much money he made. If the economic value as the head of the family is lost or reduced, which will feel the loss are his relatives. The risk of loss of income that must be covered by the family of the deceased.

To reduce this risk in modern times has taken one way to assign or delegate the risk to another party, in this case the Institute of Life Insurance business that specializes in this field as a profession. Delegation is more popularly known risk by buying a life insurance policy.

Types of risk to insured
Throughout human life is always faced with the possibility of events that can lead to lost or reduced economic value. This resulted in losses for themselves and their families or other interested person. In other words, humans have always faced the events that will lead to the following risks;


(1) Passed (death) either natural (natural death) and died at a young age due to sickness, accident (accidental death) and so forth.
Each person must be dead, although it is uncertain when it will happen. Breadwinner's death would result in the loss of source of income for the interested. It is therefore necessary financial guarantees within certain period of time during which abandonment can not adjust to new conditions.

(2) Disability agency (disability) due to illness or accident.
As a result of illness or accident, a person is physically or mentally unable to work temporarily and thus affects earnings. Whereas if a person suffers total and permanent disability, they can not work at all.

(3) Critical Illness
Critical illness can come at any time regardless of age, whether a person is young or old. Critical illness that can not be known when her arrival and can not be known with certainty.

(4) Old age (old age) / Retirement
Old days of events will occur, but how long it lasts days old life, can not be known with certainty.

(5) Education
Development of education the longer the better. Cost of a child who will continue the longer even more expensive. Parents must be able to anticipate the development of education very seriously, because the cost of education now and the next ten years would have been much
different

The types of life insurance policies
Of various types of life insurance available today, there are basically 3 types of life insurance;
1. Term life insurance (Term Insurance)
Life insurance is a contract whereby the sum assured is paid only if the death occurred in the period of insurance is still valid. Term Insurance is the simplest form of insurance and the elderly. This type of insurance is sometimes referred to as temporary insurance, according to insurance. Amount on insurance premiums is also the cheapest compared to whole life insurance and life insurance Dwiguna.

2. Life Insurance (Whole Life Insurance)
Life insurance is designed to provide lifetime protection for life insured during the policy he stays active keeping with its policy through the payment of premiums. In addition to protection dies, the policy in also provides a savings element known as a cash value that arises because premiums remain.

3. Life Insurance Dwiguna
Insurance is composed of two elements, namely protection and saving souls. Mental Protection provides death protection. Elements of saving on insurance is higher and so appropriate for the purpose of saving money. With a savings element adanay higher than the Insurance Term Life Insurance and Life lifetime

4. Unit-linked life insurance
In addition to the above three types of policies also called traditional policy, the life insurance business is also known as unit-linked insurance policies. Unit-linked life insurance policies combine insurance with an investment component. This policy provides life insurance policyholder protection as well as the opportunity to participate in investments managed by the insurance company. Funds placed in the cut for insurance products and the rest is invested in units of the relevant fund.
The purpose of this policy is to invest. By linking the results of unit-linked investment policy with the performance of a fund, policyholders get potentially higher investment returns than traditional policies. Investment risk is entirely the responsibility of the policyholder and the possibility of policy value could go down. So, potential policyholder investment returns greater than a traditional policy, the investment risk is also great.

The types of unit-linked products
1. Single Premium
For single premium, the premium is paid once (lump sum) and is used to buy units of a fund.

2. Regular Premium or Regular Premium
For this type of premiums paid periodically or regularly. The unit was purchased so the premium is received.