If the generation of our parents and grandparents prepared more for inheritance in the form of property, now parennials have the option of preparing an inheritance with life insurance. Compared to other instruments, preparing an inheritance with life insurance can bring more 'advantages'. Check out the following calculations.
Rico, a 30 year old employee. Head of household. His wife doesn't work. Have two children aged 5 years and 3 years. He was eager to prepare an inheritance for his family. With his position as the sole breadwinner and still having young children, of course Rico's responsibility to provide for the family's financial needs is quite large.
To be able to achieve the desired inheritance target, Rico would need to calculate first. How can the current family's financial needs be fulfilled, but also while preparing funds for inheritance.
Setting Up a Life Insurance Inheritance
For example, Rico wants to collect an inheritance fund of at least IDR 1 billion for his family. Rico certainly has many options to achieve his financial goals. From starting in installments to collect cash or property. Before deciding, let's count and compare one by one the available instrument options.
1. Savings
Savings is an instrument that you can use to raise funds. The risk of loss by raising funds through savings is relatively small compared to investment instruments. However, the interest or yields obtained are very thin and even almost imperceptible. So to collect funds in large quantities, the time required is relatively longer.
For example, from Rico's current income, he can set aside a maximum of IDR 1 million per month for inheritance funds. To reach IDR 1 billion by saving IDR 1 million, then:
1.000.000 x 12 = 12.000.000
1.000.000.000 : 12.000.000 = 83,33
With the calculations above, it was only at the age of 113 that Rico's inheritance funds were collected. However, is there any guarantee that Rico will still have that long? Meanwhile, if you look at the life expectancy in Indonesia, according to data from the Central Statistics Agency in 2021, it is an average of 69 years for men and 73 years for women.
2. Investment
What about investment? Investment is intended as an instrument to raise money in order to achieve long-term financial goals. In terms of returns, it varies greatly depending on the type of investment instrument. The period of time for collecting funds can also be shorter compared to savings. However, keep in mind that the investment risk is quite large. There is potential profit, but you also have to be prepared for a potential loss. And according to investment principles: high return, high risk.
Back to Rico. For example, Rico chooses an investment instrument that has a potential return 11% per year. With his condition as the head of the household and the sole breadwinner, he chooses a mixed mutual fund that has the potential for higher returns than savings but with relatively less risk than investing in stocks.
Based on investment calculations, if Rico sets aside IDR 2 million per month with a target of IDR 5 billion, it will take him 254 months or about 21 years. When compared to savings, the time needed to raise funds through investment can indeed be faster.
However, as explained above, there is no guarantee of a certain return . In addition, Rico also needs to prepare himself if he is exposed to the risk of loss. Not to mention the risk of dying. What if only 1 year of investing turns out Rico has to die? So the target of preparing an inheritance of IDR 1 billion could be just a memory.
3. Life Insurance
The next option is life insurance. By setting aside IDR 1 million per month to pay premiums, the Sum Insured that can be obtained can of course reach IDR 1 billion or even more. It depends on the insurance product you choose.
With his current age, it turns out that Rico only needs to set aside IDR 268,000 per month to be able to get a UP of IDR 1 billion. It's a long way from the money that Rico has to set aside for saving and investing, isn't it? You could say, Rico's 1 month of protection costs the same as coffee budget for a month.
Moreover, Flexi Life can provide a protection value of up to IDR 5 billion. With Rico's current condition, if he wants to collect an inheritance fund of IDR 5 billion, then he needs to set aside IDR 1,340,000 per month. By setting aside funds that are slightly larger than the allocation of savings and investments, the Sum Assured which can become an inheritance fund for his family is very different.
How about you? You can check the premium according to your current needs and conditions here.
Not only in terms of a smaller nominal, by using life insurance, Rico no longer has to worry if he dies at any time. Once the life insurance policy is active, the Sum Insured can be disbursed and can be used by the family to continue their life.
4. Home
How about setting up a house as an inheritance? Homes do have the potential for price increases in the future. However, leaving an inheritance in the form of a house is usually more complicated than cash.
First, it needs maintenance. Second , not necessarily the family left behind needs the house. Third , if the heir is not only one person then the division will be more complicated. Even if it is sold, it will take time. Not to mention that there must be a mutual agreement between the families regarding the selling price that will be released. Don't forget to also take into account the costs that will arise from the sale, such as sales tax.
Moreover, the basic function of insurance is as protection. So it can minimize you, especially those who act as the backbone of the family, for the financial risks that can occur when you die
For those of you who have Flexi Life , another convenience you can get is flexibility. Registration can be done online without a medical check . You can also set your own premium and target Sum Insured that you want according to your financial condition.
With 5 minutes of registering, when the policy is active, if something happens to you until you die, the Sum Insured can be disbursed and can be used by your beloved family to continue living.
To simulate the premiums and Sum Insured that can be obtained according to your condition, you can try it here . With Flexi Life , preparing #WarisanHingga5Billion is no longer just a dream.
If you want to know more about Flexi Life, you can directly visit the newbie Also follow this blog to get other useful tips.
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