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Saturday, May 09, 2009

Insurance is Important

Today I have a question from Andy in Spring Lake, NJ. I hope my answer is fit to you.

Dear U-A

Some time ago I met an insurance agent to apply for an insurance. But in the explanation tell that everyone who is working should have life insurance. Now I work in a private company in Jakarta. I have him with one child under five. My wife does not work (housewife). I want to ask whether every person who works must have life insurance (especially) or not all? Thank you.

Andy – Spring Lake


Indeed the correct part of insurance that the function of insurance is to protect someone earnings. This means every person who already has revenue should also have life insurance.

But in my opinion, that should be protected is a living for his live, not his incomes. If we only a person who celibate but still have to work with. Because of the stag and does not bear the burden of other people, then the revenue is only for himself. If there is such as dies, then no party subject to financial conditions.

Other well as if he has insurance, whether it's him or bear living parents. So he should have life insurance because if he dies then abandoned the family or parents will lose their source of money during him.

Remember, the function of insurance is as protection of financial risk on the possibility of natural occurrence that is not planned. So, that should be seen if someone need insurance or not is to see the financial risk of what will happen when the case of natural. If the parties are subject to the financial condition, it should insure soul. But if he does not have insurance, then have a life insurance is not the priority.

This logic can also be used in determining the amount of insurance money that should be taken. Namely how to calculate this for the living enjoyed by him.Preminya payment if possible, set the insurance money is big enough to bring the needs of abandoned forever. If the fee is too large, take the insurance money can make at least needs to be able to get a substitute for living. For example, living for several months until his wife could have a job. Or until children reach adults age and can find them living.
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