- Introduction to Life Insurance
Life insurance policies in Thailand can basically categorized into 4 types, which are:
1. Whole life
This type of insurance aims to compensate the beneficiary in case of death of the policyholder. Specifically, it provides protection for the entire life of the holder or until he/she reaches the age of 99.
2. Savings or endowment
It offers combined benefits of savings and life insurance. The policy provides protection for a limited period of time as may stipulated such as 10 / 15 / 20 / 25 or 30 years. The policyholder will receive (1) financial benefits in every specified period such as 3 or 5 years, (2) coverage benefits if he/she stays alive until the time specified in the contract. The beneficiary will receive death benefit in case the holder dies within the insured period.
3. Term life
Term life insurance provides protection for a term period of 5 / 10 / 15 or 20 years as may stipulated. The beneficiary will receive death benefit if the policyholder dies during the specified term. However, if the holder outlives the time period, he/she will not receive any form of return.
4. Fixed regular income after retirement
It is designed to respond to retirement needs. The policyholder will receive equal amounts of return upon retirement until death or until the period specified in the contract.
- Insurance for Retirement Purpose
As mentioned above, the fourth type of insurance is designed to include life coverage and retirement savings of the policyholder. The holder makes premium payments for a specified period to get life coverage. Additionally, after the retirement age, he/she will receive benefits on a regular basis.
Example of insurance for retirement purpose:
1. The policyholder makes premium payments for a period of 10 or 20 years as specified.
2. After the holder has contributed premium payments for the specified period, he/she will receive the following benefits:
2.1 Life protection for a period which can be 10 / 20 or 99 years of age as specified.
2.2 Other forms of benefits such as
2.2.1 Lump sum payment (2% of the coverage amount multiplied by number of years of the premium payment period)
2.2.2 Annual amount of 10% of the coverage amount until the policyholder reaches the age specified in the contract.
2.3 Dividends generated from investment.
Premium paid for an insurance policy with the term of at least 10 years at an insurance company incorporated in Thailand is tax exempted for the amount actually paid but not exceeding 50,000 baht per year. Benefits received from the life insurance policy are also tax exempted.