Traditional Insurance
Traditional insurance is a financial product that provides protection against specific risks, such as death, total permanent disability, or critical illness, with regular premium payments. The premiums for traditional insurance typically increase over time.
What is Traditional Insurance?
Traditional insurance is a type of insurance that focuses solely on providing protection against various life risks without any investment component. Its primary objective is to offer financial security to policyholders and their families. Unlike insurance products with investment elements, such as unit-linked insurance, traditional insurance ensures that the entire premium paid is used exclusively for insurance coverage.
Characteristics of Traditional Insurance
Focus on Protection: Traditional insurance provides coverage for specific risks such as death, total permanent disability, or critical illness. No portion of the premium is invested in financial instruments. The aim is solely to offer financial security for the policyholder’s family in the event of an unforeseen circumstance.
Advantages of Traditional Insurance
Without an investment component, traditional insurance offers clear and straightforward coverage benefits. Policyholders know exactly how much the beneficiary will receive in the event of a claim. Additionally, because there is no investment element, traditional insurance premiums are typically more affordable compared to products with investment components, making it a suitable choice for those seeking insurance protection within a budget.