Some financial consultants would advice you to separately buy an insurance policy and invest your money. That will work great if you have enough time to monitor the portofolios you manage or get managed by your investment manager. Still, in case you do not want to be bothere by such a complicated thing, then you'd better choose the unit-linked insurance plan (ULIP) as to cover both health protection and investment.
The basic concept of this insurance is that any time a customer pays the premium, they actually pay the health and life protection as well as their investment. The proportion of the health protection and investments are arranged before the proposal signed.
As a prospective customer, what you need to do is to understand the proposal in detail, especially the health cover you will have. Dealing with the health protection, at least you have to posses the following important coverage:
1. Basic insurance
Basic insurance is the premium allocated for the death and/or disablement condition a customer may be risky in the future. The amount of this basic allocation is on your own. You'd better ask the agent to explain how much coverage, the premium to pay, and the limit of age coverage.
2. Crisis cover
Crisis cover deals with the severe illness a customer suffer, such as cancer, stroke, coma, and other critical illness. Make it sure whether you, as a prospective customer will have the early stage crisis cover. This is importance because most of crisis cover will only cover you if you have the advance stage of illness. In fat, the early stage crisis cover will cover your illness starting from the early stage or early detection, that you will have a great chance to be recover from such critical illness. The early crisis cover will allow the policy holder to claim anytime they are detected to suffer from the critical illness.
3. Personal accident death and disablement cover
This part of cover deals with the cover for death and/or disablement caused by an accident. The insurance company will pay the policy holder in case the policy holder get an accident, either died or disabled. The maximum coverage of age will be listed on the proposal, then ask the agent to explain it clearly.
4. Hospital and surgerical coverage
This is extremely important for you to have the cover because it could takes you such expensive money of being hospitalized. The company has certain plans and limit for each plan for you to choose. The higher plan you choose, the higher premium you have to pay. In fact, some company will include such items as the room cover, medicines, and some others. Ask the agent to explain them clearly.
5. Payor cover
Payor deals with the premium paid by the insurance company for you in case you have a certain crisis illness. Make it sure whether the payor is for the waiver only - the premium for protection - or for both the protection as well as the investment.
There are perhaps some other coverage an insurance company offer, but those five covers are the basic ones you need to possess dealing with the life and health protection. Be wise in proposing each of the coverage.
Then, the next thing you have to understand is the portofolio(s) you will have dealing with the money invested along with the premium you pay. There are at least three kinds of portofolio allocation you could choose: either single kind of portofolio or mixed of them.
The kinds of portofolio to understand - perhaps, insurance companies will have different terms of portofolio for one to another. In fact, there are three kinds of them:
1. Cash fund
This kind of fund has the lowest risk as well as lowest investment yield. It sometimes sometimes will be a little higher return on investment than the deposit rate in the banks. This fund will be invested in deposit at most and a little part of them will be in stocks. This portofolio is suitable for those who invest the money in a short time (less than 5 years).
2. Managed fund
Managed fund is a portofolio a customer could choose as their investment. It consist of an event mixture of cash fund and equity fund. This investment is suitable for those who invest their money in moderate and long time.
3. Equity fund
This kind of portofolio is a portofolio where the money invested most in stocks. This is suitable for those who intend their investment for a long period of time (more than 10 years).
Unit-link insurance plan is best for the busy people who have no time for manage both the health protection as well as investment.
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