Insurance is a pivotal financial topic and is one of the pillars of Wealth Management. An insurance which provides financial protection for beneficiaries through sum assured in case the risk of death of the insured occurs is life insurance. Take a look at the myths regarding the definition, benefits, costs, and how insurance works below.
- Myth: Life insurance is only necessary when you are old
In Fact, death is something that can happen at any time regardless of age. Meanwhile, the family of the deceased ought to go on with their lives with various necessities of life. Therefore, it is not only the elderly who need life insurance. Those who are the main breadwinners, regardless of age, are advised to have life insurance so their families can still fulfill theirs life needs even if the breadwinners has passed away. In addition, the premium depends on age, lifestyle and health condition. A young man with a healthy lifestyle can pay premium more affordable. On the other hand, if it is submitted by the time someone is aged and his/her body's condition starts having problems, the premium cost becomes higher and even, in the worst case, the insurance application can be declined by the insurance company.
- Myth: Life insurance is not necessary for those who are still single
In Fact, when someone starts working, he may become a breadwinner to support his/her parents or siblings so that if there is a risk of death, his/her dependent family’s financial life will be threatened. By having life insurance, the Sum Assured can provide their lives before other income comes.
- Myth: Insurance provided by the office is sufficient
In Fact, office insurance only covers health insurance and pension guarantee with restricted limits. This insurance does not cover the risk of death. Therefore, we need to complement office insurance with life insurance.
- Myth: Life insurance is the same as investment
In Fact, unlike investment products whose results are determined by market conditions, life insurance can provide certainty in the value of the sum assured if the insured dies. Therefore, insurance is important to be part of asset diversification in Wealth Management.
- Myth: Life insurance is the same as inheritance
Life insurance is indeed part of inheritance planning which known as liquid, easy transfer and tax free, so at this point it is a fact. It is called liquid, because it is different from other assets which may only be accessed or utilized by the heirs after going through the inheritance deed process, and requires a long time and additional costs. On the other hand, insurance can be disbursed simply by completing death documents, family documents, policies and other documents according to the insurance company's requirements. It is called "easy transfer", because the beneficiary has been determined at the beginning in the policy, while other assets must follow the provisions of inheritance law. Insurance is also tax-free, as long as the policy is reported as part of the assets on the policy holder's SPT.
- Myth: Life insurance is only be beneficial for heirs
In fact, some insurance also provides benefits that can be perceived by the policy holder while the insured is still alive. Insurance is supposed to be a "just in case" because there are risks that occur beyond our control, but certain insurance provides guaranteed cash value benefits, which can be a loan or withdrawn by consequences of the policy ending. With the benefits of this policy loan, policy holders can fulfill their funding needs while still maintaining the benefits of life insurance. Additionally, there are terminal illness benefits which can help to meet various needs when the insured is diagnosed this condition by a doctor.
In order to fulfill customer protection needs, BCA collaborates with BCA Life, providing BCA Life Heritage Protection product, a traditional life insurance with protection period up to 99 years and life benefits for policy holders/insured.
For further information regarding life insurance product from BCA Life, you can visit the nearest BCA branch.