If you are currently seeking for a suitable life insurance, the question that may come up in your mind is, “What is a life insurance deductible?” before you get the answer of it, it is highly recommended for you to get deeper understanding about things that related with life insurance. For many people, choosing a right and suitable life insurance that meets your needs and suitable with your finance may be too confusing. They can get confused when they are being offered with many choices by the life insurance companies. Different companies may have different promotion of life insurance products. This factor may become the first aspect that makes potential customer get confused which life insurance is best to choose. Other point that can make them confused is they do not have an adequate knowledge to understand about certain jargons being mentioned in the life insurance policy. These two conditions often make the potential customer accept and agree to use the life insurance without asking deeper explanation about unfamiliar jargon. In fact, it is their rights to get clear explanation about any information related with the products that they are going to purchase. Yet it is also very important for them to know the meaning behind those unfamiliar jargons. However, even though there are still, at least, almost all life insurance companies have similar things in common, in term of certain universal jargon. Above all, to choose a life insurance needs a careful and deep consideration, since you need to ensure the life insurance that you are going to choose is able to cover your all personal life necessity.
Another reason why understanding jargons in life insurance is important because, In case you are going to propose a claim, you can prevent unwanted things happen. For example, you do not understand about life insurance deductible policy. This policy makes your life insurance claim is not being paid fully by the life insurance company. Thus, in order to prevent this case happens, a life insurance holder is expected to understand about the important jargons related with life insurance and to learn about the process of how the life insurance claim coverage works before they finally choose the life insurance product. Below are some popular question and brief explanation which related with life insurance deductible.
Why do I need to apply life insurance?
Life insurance is mostly purchased in order to protect your financial future to cover your family life needs. For example, parents use life insurance to secure the potential lost income due to one parent dies. So that the lost income will be replace and supported by the life insurance company for them to be able to pay the bills, fund school tuition and for any other life expense needs to get survived. The parents usually choose to purchase this product because they are aware that changes may happen anytime in life, so they need to be prepared to have ones. It will be a different story, if in case your parent spouse dies or parents get divorce after the children are grown and no longer stay at the house. Then, the life insurance may no longer be needed and the life insurance holder may choose not to use it.
I do not understand about deductible jargon in the life insurance product and how the claim coverage works, can you explain about it?
There are many jargons being used to explain the policy in life insurance product. There are term insurance, whole life insurance, deductible and many more. For the Deductible’ jargon, it is similar to ‘Own Risk (OR)’ jargon. It is a certain value of losses to be paid by the life insurance claimer prior to certain caseS, either it is in form of a percentage or certain value of claim being paid. If you find other unfamiliar jargon, you may ask directly to our PIC (people in charge) or to the customer service of life insurance company to explain you deeper about other important jargons in life insurance policy.
What are the aims of life insurance deductible?
There have been many life insurance companies that implement deductible policy. This is due to several factors as below:
In order to build self awareness for the life insurance holder to be more careful about managing their financial condition, especially for those who have more than 3 kids or for those who have many dependents to be supported for. This is because if they choose to apply life insurance but they do not balance it by managing their financial, then they also will be at risk in the future. Even though the life insurance holder and life insurance company have met an agreement that there will be a financial support to support their life needs in the future. With this life insurance deductible, both life insurance holder and life insurance company are agree that if the life insurance holder later propose a claim, they have prior realized that the life insurance company may not fully cover the claim. The life insurance company has the right to cancel or not agree with certain case that does not suitable with the policy agreement.
In order to make a quick claim process, the company also needs to make sure that there is some little process that needs to be shortened. This process may looks small but actually may give bigger impact. With this deductible policy, the life insurance company may not cover administrative costs or any other registration fees for covering the life insurance claims. For example, if a life insurance holder is going to claim only Rp 100.000, then they need to pay it with their personal money. The life insurance will not cover it due to some considerations. The first consideration is that the actual process of that case needs higher expense to completing the requirements, the evidence. In addition, these requirement process expenses may be higher than the value of the claim itself. Thus, in order to process other life insurance claims more quickly, a company implement this deductible policy by avoiding the small administration cost that needs longer time to process.
Hopefully above explanations can answer your question related about “What is a life insurance deductible?”