When you are looking for insurance, you may need a comparison between an insurance product with other products from different companies before deciding which one would choose.
This article provides guidance on how to compare products unit-link insurance types. In general, unit-link product comparisons can be made by looking at four aspects, namely the amount of premiums and benefits, the projected value of the investment, the costs of the policy, insurance benefits and features in detail.
Magnitude Premiums and Insurance Benefits
How much and how benefits insurance premiums, this is the first thing most easily seen when comparing the illustration of unit-linked products. For example, with a premium of 1 million per month, any benefits, UP or sum insured soul how much, how many accidents UP, UP how many total permanent disability, critical illness UP how, inpatient hospital room plan how, no free premium benefits or not, etc.
In comparing several products, insurance benefits should be similar in order to be compared. If in illustration of unit-link no benefit UP A life, accident, total permanent disability, critical illness, and the release of premiums, then the illustrations unit-link B and C and D were the same. If in unit-link A hospital benefits offered, then in the other illustrations were similar. A proposal if no hospitalization benefits, then you are comparing with the proposal and that no hospitalization benefits, then the comparison is not equal.
Surely everyone will tend to choose products that provide greater insurance benefits with the same premium, or lower premiums with the same benefits.
Some illustrative examples of premiums and benefits of unit-link can diilihat HERE.
Projection of Value Investing
Projection value of investments needs to be seen when you compare the illustrations unit-link. If insurance premiums and benefits of each, see also how the value of their investment. In comparing the value of the investment, the investment return assumption used to be the same, for example both 5%, 10%, 15%, or 18%.
For example, you get the deposit premium illustrations together 1 million per month, the same insurance benefits (for example: 500 million inhabitants UP, UP critically ill 500 million, 500 million accidents UP, UP 500 million total permanent disability, and there is a premium exemption) , then compare the value of the investment assuming the same investment. In the 5th year of the investment value how much, how many 10th year, and so on. Obviously if the same insurance benefits, people will tend to choose the larger investment value.
Often between one proposal to another proposal does not use the same assumptions, ask your agent to make another proposal on the assumption that you want, for example by changing the type of fund.
Premiums and benefits and the projected investment value is the ratio of the surface. Deeper, you are also advised policy attention to costs imposed. The costs of unit-linked policies generally cover the cost of the acquisition, the cost of insurance (or tabarru in Takaful), administrative expenses, investment management fees, and cost of top up or buy-sell price difference unit. The most Noteworthy is the cost of acquisition and cost of insurance. Administrative costs can be considered, the remaining difference was not significant.
The costs of this policy is usually included in the proposal unit-link, but not all unit-linked write complete. For these incomplete, you can ask an agent.
Proposal unit-link from Allianz, which Tapro (Allisya Protection Plus and Smartlink Flexi Account Plus), including those that do not include the costs of the policy are complete. So let me write here:
- Cost of acquisition: Year 1: 75%, Year 2: 40%, Year 3: 15%, Year 4: 7.5%, Year 5: 7.5%, Year 6 and onwards: 0%. Total: 145% calculated on the basic premium.
- Insurance costs (tabarru): Depending on the benefit, the amount of UP, gender, and age. Insurance costs the first year included in the proposal page 1.
- Administrative costs: 26,500 per month.
- Investment management fee: 2% per year (for equity funds)
- The difference in the sale price of the unit (in other places can be compared with the cost of top-up): 5%
Armed with this information, please check in policy or illustrations unit-link you how much it costs and charges. Obviously the lower the cost structure, more favorable for the customers.
Features Insurance Benefits in Detail
Over into another, and this is most important, is a feature of the insurance benefits are taken. After all, we seek to obtain insurance protection benefits. Ideally we get good protection benefits with low premiums. But the availability of products on the market do not always conform to our wishes, and no unit-linked product superior or best in everything.
Perhaps only in the proposal A, UP is larger than B proposal, but to detail the benefits you are more likely to agree with the proposal B. It may equally benefit critical illness protection, but its features is certainly no difference. Equally hospitalization benefits, details of the benefit is different. Even equally benefit basis can have a significant difference. There are pure basic benefits bear the risk of death, there is the basic benefits that bear the risk of death OR total permanent disability.
Features in detail these benefits will not all be included in the proposal. Therefore, you should ask the see the example policy. But from my experience a couple of times shows an example of a policy to prospective clients who ask, generally an example of such policy left alone without a read, or read but poorly understood. So still more practical if you ask directly to the agent through a more in-depth discussion.
In this section I handed him the basic guidelines of the things that you can discuss with your prospective agent about the features of insurance benefits commonly offered unit-linked products. This guide covers the basic benefit, critical illness rider, rider accident, total permanent disability rider, free rider premiums, and hospitalization rider.
Basic benefits of unit-link insurance usually give money if the insured dies. The period of protection is usually up to a lifetime (up to age 99 or 100 years). It is in unit-link in general.
But there are also unit-link which essentially benefits not only died, but combined with the risk of total permanent disability (CTT, TPD). What does it mean? If the insured suffers permanent disability, the policy ends even if the insured has not died. With the end of the policy, then so does other benefits such as hospitalization, critical illness, accidents, and freely deposited.
There is also a unit-link insurance period essentially no benefits until the age of 100 years, but up to 75 or 80 years.
Do not forget, also compare the cost of insurance (tabarru) for the same age and UP. For example: what is the cost of insurance for UP 1 billion, 30-year-old man.
Critical Illness Rider
In general, critical illness rider is divided into a critical illness rider who bear the final stage only (advanced stage), and critical illness rider which bear at an early stage (early stage). Surely critical illness rider who bore an early stage will be more costly than the critical illness rider who bear the final stage only. Critical illness rider is also distinguished by its claim, there is reduces UP basic and there is not reducing.
Fuller longer, in comparing the benefits of critical illness between one product with another product, there are several aspects that need to be observed, among other things: the number of conditions or diseases are covered, the validity period of protection, bear at an early stage or late stage only, the claim reduces basic UP or not, there is a requirement of survival period (period of survival) or not, if there is how many days of survival periodnya, and the cost of insurance.
The Allianz Tapro there are three types of critical illness rider, namely accerated CI, CI +, and the CI100. The difference can be seen in the following table. Hope can be a comparison with similar benefits from another illustration.
Rider Accident (Personal Accident)
In general, bear accident benefit rider death or disability due to accident. There is a unit-link that adds the benefits of compensation if the rider is treated as an accident. The rest is not much difference in the detail of this rider between the unit-link with other linked units. So, if you want to compare, just enough to be seen insurance costs and a protection. The cost of insurance on the accident rider is fixed (flat), are not affected age. The difference is the occupational hazard class.
The Tapro Allianz, is available only one rider crash, which ADDB (Accident Death and Disability Benefit). The benefits provide the sum insured if the insured dies or permanent disability due to an accident, the insured protection period till 65 years old.
Usually there is little difference in the percentage of disability. Full details about ADDB Allianz including the percentage of disability, can be seen in ADDB.
Rider Total Permanent Disability (TPD)
Most of the unit-link has a total permanent disability rider or TPD (Total Permanent Disability). But some are not, and makes the rider this part of the basic benefits as described above. Not much difference in the detail of this rider between one unit-link with other linked units. So, if you want to compare, just enough to be seen insurance costs and a protection.
The Tapro Allianz, Rider TPD gives the sum insured if the insured suffered permanent disability, either due to illness or accident. The period of protection until the insured is 65 years old. Definition of total permanent disability is permanent loss of function in two limbs and sight, two arms, two legs, two eyes, or a combination of all three. Rider also provides protection if the insured suffered life of independence, the criteria could not do 3 out of 5 basic daily activities. TPD rider claims exist that reduce UP basic, some are not reducing the basic UP.
Free Rider Premium
Free rider premiums, as the name implies, the benefit pays a premium by the insurer if the policyholder experience a risk assumed.
Variations in this rider, among others: the type of risk that makes free deposit premium, time protection, and of course the cost of insurance.
Talk to the type of risk that makes free premium, in general, bear the risk of critical illness or total permanent disability. But there is also a free bear premium because of the risk of critical illness, without a total permanent disability, because if the total permanent disability policy ends.
If the policyholder is different from the insured, the premium-free benefits can also be added to the risk of death. For example if the insured child, the policyholder's father, then the rider can be added free of risk premiums father died.
Rider can also be added to the pair policyholder (Spouse Payor).
The Tapro Allianz, the free rider premiums for critical illness or total permanent disability called Payor Benefit, valid until 65-year-old policyholder. Then free rider premiums because died called Payor Protection, validity period till the policyholder as if the 65-year-old. More can be read HERE.
Rider hospitalization in general there are two kinds, namely the claim is cashless and be reimbursed. Rider called cashless hospitalization health insurance, while the reimbursement is usually in the form of daily benefits.
For cashless hospitalization rider, there are several things to consider when comparing products, among others: whether the claims according to the bill or no ceiling for each benefit, how the annual limit, details of any benefit, any additional benefits (chemotherapy, dialysis, etc.) , and how much insurance costs.
The Tapro Allianz, cashless hospitalization rider called HSC + (Hospital and Surgical Care +). Standard features provide cashless card facility, there is a ceiling for each benefit (inner limit), there is no annual limit, and provide additional benefits for chemotherapy, dialysis, and physiotherapy.