by - Oktober 01, 2018

Source: Kotak Insurance

"Based on the record of the Otoritas Jasa Keuangan (OJK) in 2017, users of insurance industry service in Indonesia are only around 10%. Not achieving economic equality at the lower level, predicted as one of the factors of the low number of insurance users in Indonesia. 
However, how important is this insurance service?"

Haloo friends! In this post, I won't talk about fashion or traveling. Then what is it about?
Life insurance!

Yes! Life insurance. On last Friday night, I became a speaker for a little youth community in my town, Bogor, Indonesia. It was about Urgency of Insurance Business. A little talk about this youth community, actually I just joined this Jurasep Institute maybe around a month ago, and this was my third! The members of this community are still not many, because most of the members were just those who lived in Bogor or lived in around of Ciomas district. 

Seeing the number of young people in today's era who often hang out/spend a lot of money but not productive enough. Finally some of my friends proposed to create a youth community whose concept was hanging out while exchanging insights/opinions. Honestly, I really appreciate this, why? In my first meeting following this community, I got a lot of stories that were new and so interesting. Then in my third presence, I was asked to be a speaker and shared about insurance which is my current job area. 

Teaser of Jurasep Institute for 28 September 2018

In this Jurasep Institute session, there were four points that I would discuss:
1. Introduction: Why the awareness of insurance in Indonesia is still low?
2. Types of Insurance
3. Why insurance is important?
4. Tips before buying insurance

Introduction: Why the awareness of insurance in Indonesia is still low?

Insurance concept actually has been applied since the era of industrial revolution. The workers in the lower economic level formed an independent association to collect money among of them that will be used if there is an incident where one of them is fired, sick, or dies. This is the concept of an insurance where the money collected is considered as a premium for sharing risks. Then along with the development of the era and technology, the concept of insurance increasingly expanded and developed until finally entered  to Indonesia.

But unfortunately, insurance in Indonesia is still considered as a luxury item which is only for middle and upper level people. Many people still think that there are still many other needs that are more urgent than having to pay insurance. Even though insurance should be an important matter and should be considered as one of the fixed costs in our financial arrangements. Insurance is not a burden because today, with the many insurance markets, we can choose which insurance that has lower price and has high benefits. This is certainly an interesting thing for our finances.

Then the other factor is also due to the lack of insurance literacy that causes many people do not know the benefits of insurance. Thus, now insurance companies in Indonesia encourage people by promoting the importance of insurance and giving knowledge about insurance for public, even starting from students at the University.

Types of Insurance

Various insurance products continue to develop, both types and functions. Before, I will tell you some types of insurance:

  1. Life Insurance
  2. Health Insurance
  3. Property Insurance
  4. Vehicle Insurance
  5. Injury Insurance
  6. Travel Insurance
  7. Home Insurance
  8. Accident Insurance
Actually there are many other types of insurance that have not been mentioned, but that is still not familiar in the global. I mean, it is still only being developed in a few countries.

In that night's conversation, someone asked:

A: Are there insurance companies that have unique protection in Indonesia? Or how unique is the type of insurance in Indonesia?
Me: Honestly, as person who works in life insurance, I do not know many types of loss insurance. Because usually, the unique insurances exist in the general or loss insurance. Like in China, where there is insurance for women's wallets or in America there is insurance for a coat if it is lost.
A: Is it possible there will be kind of that insurances in Indonesia?
Me: Of course. But we don't know when that will happen. I see that these types of insurance develop according to the people's needs. And of course that needs should be supported by other demographic factors, such as the increasing of our economy and education level.

Why insurance is important?

Some benefits can be obtained if we have insurance:

  1. We can reduce the risk of unexpectedly large financial budget loss such as being hospitalized, accidents that cause disability, loss of motorbikes, house fires, damage to vehicles, and many others.
  2. Gives a calm/safe feeling and reduces stress because the risk has been borne by the insurance company.
  3. If we die or get an accident, insurance can reduce the burden on the people we love / family because the sum insured / compensation money will be released.
  4. Annuity, guarantees the flow of income as long as they are alive. Usually this annuity benefit is taken by those who have retired. Annuity premiums are paid only once at the start of the contract and are relatively expensive.
Tips before buying insurance?

Nowadays, there are many insurance companies in Indonesia, both local, foreign, or joint-ventures companies. According to OJK records as of December 2015, there were around 137 insurance companies with a breakdown as follows:

  • 76 companies of general insurance
  • 50 companies of life insurance
  • 6 reinsurance companies
  • 3 government insurance companies
  • 2 social insurance companies
The number of markets certainly has a positive side for people because people can choose the needed product from many companies with low prices and great benefits. But it is also can be a negative side because if you do not have basic knowledge about insurance, it is difficult to choose which insurance is good.

Thus, even though I am not a professional, but as a person who works in an insurance company, I will tell a few tips about the steps that must be taken before deciding to buy an insurance product:
  1. Get to know your needs. Buying insurance is not the same as buying clothes that can be purchased whenever we need a new one, because this insurance is long-term. So a mature decision is needed. It is expected that we do not buy the product wrongly. For example, I, the company where I work provides health insurance for a hospital if I am sick both inpatient or outpatient. Therefore, I meanwhile do not need health products that provide large sums of insurance. This can also save my expenses in paying premiums.
  2. Comparing products with other insurance companies. Just like when you shop, usually we will compare the prices of products from various stores.
  3. Finding out the company's track record. The credibility of a company in my opinion is very necessary, because this can be a reference whether the insurance company that will cover us is serving us well or not. This measure is not merely seen from the length of time the company was established. But it can also be seen on print, social media, or electronic media about how companies serve all customer complaints, claim disbursements, business progress, and others.
  4. Understand the claim system. Today's insurance companies are competing to provide fast and easy claim services. Therefore, make sure you get insurance that has a claim service system that is not complicated and fast.
  5. Know hospital partners. For health insurance products, try to find out which hospital partners are working with the insurance company. Look for the hospital closest to your home or workplace.

Well, friends, I think it is enough for sharing sessions about insurance. Hopefully it can be useful and give a new insights about insurance. If there are still some inquiries you want to ask about insurance, you can leave a comment below this post. I will try to answer it as well as possible.

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