Tutorials1927 - In the theory of financial planning, ideally everyone should have insurance and investments. Usefulness of insurance is to protect a person or his family financially from the risks that are unpredictable.
While the usefulness of the investment is to meet future needs and keep our purchasing power is not eroded by inflation. Both insurance and investment, both are equally important.
Before answering these questions, we need to understand more deeply the insurance. Similarly, mutual funds can be divided into types of money market, fixed income, and a mixture of stocks that are tailored to the needs of our finances, insurance, too.
What is meant by "buying" insurance is that we pay a sum of money called a premium to the insurance company. Furthermore, if in a given period (insurance period) occurs on the buyer risk insurance (the insured), then the insurance company will pay the amount of compensation (sum insured). Otherwise there is a risk, then it becomes the property of the insurance premium.
Why does the insurance company can provide insurance money whose value could be very large compared to the premium paid? This is because insurance products are sold widely to the crowd. Advantages of the "many" people who do not have risk used as "savings" to pay "a little" people who are at risk.
In general insurance for individuals can be divided into accident insurance, life insurance, critical illness insurance and health insurance. The benefits of each type of insurance are as follows:
Accident Insurance
Provide coverage for the risk of death and total permanent disability due to accident. Thus, to the risk of total permanent disability and death are caused not by accident is not covered.
In practice, this insurance is often called the PADD (Personal Accident Death and disablement) or also called PA (Personal Accident). Because of the possibility of accidents is very small, generally have very low insurance premiums, but coverage is limited money.
Life Insurance
Provide coverage against the risk of death due to any reason. So died of natural causes, accidents and even suicide could get insurance money.
In practice, there are some exceptions which could cause insured money does not come out as if death occurred because the insured committed a crime. The points exception can be read on the insurance policy in question.
Because of the possibility of greater than PA insurance, general insurance premiums are more expensive but money coverage is not limited.
Critical Illness Insurance
Provide coverage against the risk of disease detected certain critical. Usually each insurer has different provisions of both the number of critical illness covered and the critical stages of the disease.
To make a claim for insurance is usually insured must prepare a very complete medical history and honest in filling out the questionnaire. With the insurance the insured is expected to pay for the treatment of the disease.
Health Insurance
Provide coverage against the risks of surgery and hospitalization in the hospital. Sometimes, people can not distinguish between a health insurance with critical illness insurance.
How it works is a health insurance cover the cost of health that arise from inpatient care in hospitals, the cost of surgery, the cost of medicines and outpatient. Suppose, if hospitalized in a hospital, then a night Insurance will provide coverage of up to several hundred thousand or a million per day.
Depending premium paid, there were only bear the cost of hospital and surgery, some are up in the cost of medicines and outpatient. The system is flexible, can be a card system so that we do not need to pay, can also reimbursement system or we pay first and then make a claim.
Most of the already insured
To you who work in the company, in fact we had unwittingly insurance benefit. For example, most companies provide health insurance benefits to employees. Some even bear to his wife and son.
Some use commercial insurance, there is also the use of BPJS health insurance. Some are both. Some companies are bonafide even have their own hospitals and eliminate or give large discounts for health care costs for employees and retirees.
Then, for those of you who are registered in the Social Security or now better known as the Employment BPJS, actually in the component also contained Accident Insurance which already includes the Life Insurance and Personal Accident Insurance.
If you feel the facilities of the company are sufficient, meaning only a critical illness that you have not yet. But if you feel that insurance is still not enough you can add to it through commercial insurance.
I think, ideally, for a person who became the backbone of the family income that should have 3 Life insurance, Critical Illness and Health before investing.
Insurance or mutual funds
Back to the original question, if funds are limited, so which one should be the priority? Is the mutual fund or buy insurance? Or is it do the same as well as mutual fund and an emergency fund?
If the funds are very limited, then I think that insurance should take priority over investment. Because when the risk occurs when new investments are not long run, it is feared that the investment value was not able to meet the financial needs of the family.
Over time when financial conditions have started to increase our new investment. What if because of this we are late, the investment results less than the maximum? Throughout the body and mind healthy, I think the lifestyle can be tailored to the capabilities and we can look for ways to increase revenue.
Can it be if we were to invest just to not have critical illness insurance? Actually it depends on each person. If you dare to take risks, lifestyle and healthy eating and no history of critical illness in the family, as well as a lot of charity and worship go ahead.
Thus sharing my time, may be useful.
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