If something were to happen to the person who supported the household finances, the family left behind would be in trouble for the cost of living. The role of life insurance is to protect against such risks.
Here, we will explain the percentage of death insurance, the average amount of insurance, the difference between term insurance and whole life insurance, etc.Life insurance is an insurance product that pays insurance benefits when the insured person dies.
Death insurance is life insurance that pays insurance benefits to the beneficiary when the insured person (the person insured) dies*.
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Life insurance is sometimes called “life insurance” to refer to death insurance, but basically life insurance is a generic term that refers to general insurance products handled by life insurance companies such as medical insurance and annuity insurance. Among them, insurance that covers the risk of death of the insured person is called "death insurance".
The main purpose of purchasing life insurance is to secure enough coverage to cover the living expenses of the surviving family in the event that something happens to the person who supports the family's livelihood. It takes time to prepare deposits and savings in case of emergency, but if you take out death insurance, the insurance money will be paid immediately even if something happens.
*Depending on the insurance product, there is also a type that allows you to receive a "severe disability benefit" instead of a death benefit if you fall under a stipulated "severe disability condition.
Percentage of Life Insurance Participation and Average Insurance Amount
We will introduce data on the percentage of people who have life insurance and the amount of insurance money. How much you need to prepare for the risk of death depends on your family situation, but here are some general data for reference.
Percentage of people who prepare money after death and average death benefit amount
According to a survey conducted by the Life Insurance Culture Center, 73.1% of people answered that they are making financial preparations for when they die. As for specific means of preparation, life insurance is the highest at 60.3%, and there is a big difference from deposits and savings, which is the second highest, at 42.8% (Life Insurance.
According to the same survey, the average amount of insurance payouts when a life insurance policyholder dies is 13.73 million yen for men and 6.47 million yen for women.
Required amount of death benefit
In response to the question, "How much insurance money do you think you will need in case something happens to you?", the average amount was 22.47 million yen for men and 11.45 million yen for women. In addition, 19.7% of the respondents answered . Fiscal year survey on livelihood security
Both men and women found that the required amount was much higher than the average death benefit amount. This may be due to the fact that the insured amount falls short of the required amount as a result of covering the shortfall with savings or reducing the monthly insurance premium.
The need for future preparedness
Let's take a look at your intentions about preparing for the future.
Regarding financial security in the event of their own death, 54.8% of all respondents wished to prepare in the future, while 40.1% had no plans to do so (Life Insurance Culture Center, 2023
It can be seen that more than half of the people want to prepare for risks in case of emergency.
Types of life insurance
There are several types of insurance that cover the death of the insured person. Understand the differences between each so that you can choose the insurance that best suits your needs.
What we are introducing here is “insurance that will receive insurance money when you die”, but there is also “insurance that will receive insurance money when you die or if you live until the expiration of the insurance period”. This is called “life-and-death mixed insurance,” and a typical example is endowment insurance.
Term insurance is insurance that protects you if you die within a certain period of time. Term insurance has a fixed insurance period (coverage period), and as a method of setting the insurance period, it is set in terms of years such as 10 years or 15 years, which is called "year expiration", and until the age of 60, which is called "age expiration". , There are things that are set by age, such as up to 70 years old. In many cases, it is set to be renewable after the expiration of the year, and the insurance amount is fixed, but the premium increases with each renewal. The expiration date is generally non-renewable.
■ Change in Premiums for Renewable Term Life Insurance
There are two main types of term life insurance: level type and declining type. Level term life insurance has a fixed death benefit during the policy period, while decreasing term life insurance has a gradually decreasing death benefit. Decreasing term life insurance is suitable for families who want to secure generous coverage for their children when they are young and want to reduce the amount of coverage as they grow up.
whole life insurance
Whole life insurance is insurance that lasts for the rest of your life. Some whole life insurance policies allow you to receive a surrender value if you surrender after a certain period of time, but in the case of early surrender, the surrender value is often less than the total amount of premiums paid. , there may be no cancellation refund. Also, there is no maturity benefit. The specific return rate (return rate) of surrender value varies depending on the insurance product.
Whole life insurance premiums are paid for as long as the insured person is alive. There are three types of “lump-sum payment,” in which all premiums are paid in one lump sum. Whole life insurance has higher premiums than term life insurance, which has the same coverage as term life insurance.
Whole life insurance with term insurance rider
Whole life insurance with a term insurance rider is insurance that combines the features of term life insurance and whole life insurance. Whole life insurance provides protection for the rest of your life, while term insurance riders can provide additional protection for a certain period of time.
However, since whole life insurance is generally the main contract, it is not possible to cancel only the whole life insurance while leaving the term insurance in the middle.
Income protection insurance
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Income protection insurance pays the same amount regularly regardless of how old the insured person died. Therefore, the older the insured person, the shorter the period during which the bereaved family can receive insurance money, and the final total amount of insurance money received will be less. In many cases, the cost of raising children and the outstanding balance of mortgage payments, etc., also decrease with the passage of time. Insurance.
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