Get to Know the Types of Insurance For You Needs

  Here is information about the types of insurance that you need to know.

Types of Insurance For Your Need to Know – The word “insurance” is certainly familiar to many people. Even though the term “insurance” is popular, the majority of the Indonesian population still does not have insurance.

According to data from the Financial Services Authority (OJK), the Indonesian public’s understanding of the meaning of insurance and its use is still minimal.

This is reflected in the level of insurance penetration or ownership by the Indonesian people.

Looking at OJK data quoted by Bisnis Indonesia in July 2021, the insurance penetration rate in 2019 reached 2.81%. This figure increased to 2.92% in 2020 and 3.11% in June 2021.

This condition is caused by the public’s lack of understanding when purchasing a policy and the insurance claim process. Another reason is also triggered by the various types of insurance offered by insurance companies.

As a result, many people, especially those who are new to insurance, are confused about understanding the benefits of each insurance policy offered. Before finding out the benefits of insurance, let’s understand the meaning of insurance.

What is insurance?

According to the OJK website, insurance is an agreement between insurance service providers (as insurers) and the public (as policy holders).

The rights and obligations between insurance services and policyholders have been regulated. Where the policyholder has the right to receive protection for compensation for loss, damage, and death from the insurance service provider.

However, rights will be obtained when the policyholder fulfills the obligation to pay premiums to the insurance company. From the definition of insurance, it can be concluded that insurance offers good benefits in minimizing the risk of uncertainty that comes unexpectedly.

Insurance is a contract between an individual or entity (known as the policyholder) and an insurance company. It involves the transfer of risk from the policyholder to the insurer in exchange for a premium payment.

In simpler terms, insurance is a mechanism that provides financial protection against possible future losses or damages. It essentially serves as a safeguard against unexpected events by providing compensation to the policyholder should a covered event occur, such as accidents, illnesses, property damage, or liability claims.

The specific terms and coverage of insurance policies vary depending on the type of insurance being purchased, such as life insurance, health insurance, auto insurance, home insurance, etc.

Benefits of Insurance

There are at least five insurance benefits you can get, that is:

  • Protect your income from sudden risks.
  • Protect the money saved to realize future plans.
  • Protecting the family’s future when death comes.
  • Protect your physical and mental health when there is a risk of an accident.
  • Provides future protection for investments.

Besides that, Insurance offers several benefits, including:

  1. Financial Protection: Insurance provides financial coverage against unexpected events like accidents, illnesses, natural disasters, or damage to property. It helps individuals and businesses minimize financial losses by compensating for the damages.
  2. Risk Management: Insurance helps individuals and businesses manage risks by spreading them among a large number of policyholders. By paying regular premiums, individuals transfer the risk of potential losses to the insurance company.
  3. Peace of Mind: Having insurance offers peace of mind as it provides a safety net against uncertain events. Individuals can feel secure knowing that they have protection in place to handle unexpected expenses or damages.
  4. Legal Requirements: Certain types of insurance, such as auto insurance or professional liability insurance, are mandatory by law. Having insurance ensures compliance with legal requirements and helps avoid penalties or legal issues.
  5. Health and Life Coverage: Health insurance provides coverage for medical expenses, ensuring accessibility to quality healthcare. Life insurance protects the financial well-being of loved ones in the event of the policyholder’s death by providing a death benefit.
  6. Business Continuity: Insurance plays a crucial role in ensuring business continuity by providing coverage for potential business interruptions, property damage, liability claims, or the loss of key personnel. It helps businesses recover and resume operations faster.
  7. Support for the Economy: Insurance companies invest premiums collected from policyholders, contributing to the overall economy’s growth. Additionally, insurance coverage helps businesses and individuals recover quickly from unexpected events, minimizing the impact on the economy.

Overall, insurance provides financial protection, risk management, peace of mind, legal compliance, coverage for health and life, business continuity, and overall support.

Types of Insurance

So that the insurance benefits match your expectations, before choosing and paying for a policy, first identify the following types of insurance. Following are the types of insurance you can choose from:

  1. Life Insurance: Life insurance provides financial protection to the insured’s family or beneficiaries in the event of the insured’s death.
  2. Health Insurance: Health insurance covers the medical expenses of the insured, including hospitalization, surgeries, treatments, and medications.
  3. Vehicle Insurance: Vehicle insurance provides coverage for damages or injuries caused by the insured’s vehicle. It also includes liability coverage to protect the insured from legal claims. The benefit of buying a vehicle insurance premium is that it provides financial protection and peace of mind if we are faced with the risk of vehicle damage. Apart from that, having vehicle insurance also makes the selling price of your car more competitive.
  4. Education Insurance: Educational protection benefits at an early age are a way to protect your child’s future. There are two types of education insurance offered: dual-purpose insurance and unit-linked insurance.
  5. Investment insurance: investment insurance or known as Unit link insurance provides protection in the form of life, health, accident and critical illness protection. Benefits in the form of protection and cash value that come from developing investment funds according to available investment options.
  6. Disability Insurance: Disability insurance provides income replacement to the insured if they become disabled and are unable to work.
  7. Accident Insurance: Generally, people don’t look at accident insurance much because they think the company they work for already provides protection for accidents while working. But try to review your activities and working conditions. If your job falls into the accident risk category, you should buy an accident insurance product. Because risks can occur anytime and anywhere, both on the road and at work.
  8. Travel Insurance: Travel insurance provides coverage for unexpected events, such as trip cancellations, delays, medical emergencies, lost luggage, or travel accidents.
  9. Business Insurance: Business insurance protects against losses and damages to a company or business, including property damage, liability claims, and loss of income due to business interruptions.
  10. Corporate Insurance: Corporate insurance is group insurance that provides protection to employees of a company. Companies generally provide corporate insurance to maintain employees as valuable assets for the continuity of their business.
  11. Old-age Insurance: Old-age insurance provides more benefits than ordinary savings. This insurance offers protection and guarantees to policyholders when they are no longer productive.***

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