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What types of insurance should you know about?

What types of insurance should you know about? | As a non-bank financial institution, insurance is known as an alternative investment, which is quite good and minimizes the risk of unexpected events.

The definition of insurance according to the Financial Services Authority website is a contract between an insurance service provider, known as the insurer, and the society holding the policy, known as the insured, that is required to pay a certain amount of premium to ensure compensation for the risk of loss, damage, death, and loss of expected benefits that may occur as a result of unforeseen events.

This term describes any measures taken to ensure protection against the threat of risk. The policyholder is required to pay the insurance company a sum of money known as the premium, which in turn undertakes to pay compensation and protect against future losses that may be incurred by policyholders from the insurance company.

If the policyholder or the insurance participant or the insured suffers a natural disaster and suffers a loss specified in the contract, the insured has the right to submit an insurance claim. The insured person whose name is on the insurance policy is not the only person who can get this insurance. Another person may also get it if the insured person chooses them directly.

Insurance itself is known in different types or groups according to purpose and risk. It is this concentration and risk that determines the measure of the uniformity of the risk incurred depending on the type of policy.

This will be used by insurance companies to estimate possible losses and decide how much to charge for each type of insurance.

Also Read: What is insurance? Learn about the benefits, elements and types

Important information on various types of insurance coverage

1. Life insurance

It is known that this type of insurance provides financial benefits to the insured after his death. There are a few distinct ways that premiums can be paid for life insurance. There are insurance companies that provide death benefits, and others that may allow you to apply for funds before you die.

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Life insurance may be purchased only on behalf of the insured person or purchased for the benefit of a third party. It is known that even life insurance is bought for other people’s lives. For example, suppose a husband can take out life insurance to benefit him after his wife dies. Parents can also take out insurance in the event of the child’s death.

2. Health insurance

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This type of insurance is also well known to Indonesian residents. Health insurance is an insurance product that solves the insured’s health problems caused by a disease and bears the costs of the treatment process.

In general, the causes of the insured’s illness, the costs of which may be borne by the insurance company, are personal injury, disability, illness, and even death as a result of an accident. It is also known that health insurance is only bought for the person who buys it or for someone else.

3. Vehicle insurance

The most popular vehicle insurance in Indonesia is a type of auto insurance that focuses on dependents in the event of injury to others or damage to others’ vehicles caused by the insured. This insurance may also cover the loss or damage of the insured motor vehicle.

Vehicle insurance is one of the most common insurance products. This type of insurance boomed during the May 1998 riots, as the incident drastically increased people’s interest in having protection for private vehicles.

Also Read: General and specific insurance benefits

4. Home and property insurance

Typically, as a resource that is considered quite valuable, homeowners protect themselves and their property, which may be a home or personal property, with home and property insurance.

This insurance provides protection against loss or damage to certain personal belongings of the insured person. This insurance also protects and helps the insured if something bad happens to their home or other property, like a fire.

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5. Educational insurance

It is the most popular insurance and a favorite of policyholders. Educational insurance is the best way to make sure you have a better life, especially when it comes to your children’s education.

The amount of money the insured person has to pay in premiums to the insurance company depends on how much education they will get in the future.

Understanding the importance of using educational insurance for children is a concern of parents today. The cost of a child’s education in the future is affected by the high cost of education and other things that hurt the economy, like the weakening of our currency against the US dollar.

Parents often choose education insurance these days because they know this will put a lot of stress on them.

6. Business insurance

This insurance protects the company from damage, loss, or big losses that could happen.

This insurance provides compensation for damage caused by fire, explosions, earthquakes, lightning, floods, hurricanes, rain, collisions, and riots.

Insurance companies typically offer a range of benefits, ranging from business insurance such as protecting employees as a business asset, protecting investments and business, comprehensive life insurance for all employees, and health packages for employees.

Also Read: More details on the definition of insurance

7. General insurance

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General insurance or general insurance is protection against the risk of loss or loss of benefits and legal liability towards third parties. This general insurance guarantee is short-term (usually around one year). General insurance can be divided into several types, including:

  • Social insurance

This type of coverage is an insurance that every person or resident must have in order for everyone to have old age insurance. Contribution payments are made forcibly, for example by slashing someone’s salary each month.

  •  Voluntary insurance

This insurance is provided on a voluntary basis. This type of voluntary insurance can further be divided into 2 categories, namely: government insurance and commercial insurance.

Government insurance is government-run insurance, while commercial insurance is insurance designed to protect an individual or family from the risks that may arise from unexpected events.

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8. Credit insurance

Credit insurance is protection against the risk of default by the debtor of loans or cash loans such as working capital, trade credit, and others. It is closely related to banking services, especially in the credit sector.

A loan is a loan in the form of money made by banks or financial institutions as lenders to their customers.

This loan insurance is meant to protect banks and other financial institutions from the risk that customers won’t pay back loans they’ve been given. It also helps give customers direction and security for their loans.

Also Read: 3 Main elements of insurance, as well as their functions and types

9. Marine insurance

This types of insurance is particularly present in the maritime sector, the function of which is to provide both the carrier and the owner of the cargo. Risks that may arise in connection with the creation of this insurance include damage to cargo, damage to the ship, and injury to passengers.

Marine insurance is a transfer of risk for both you and your baggage when using shipping services. This insurance covers the use of freight forwarding services to deliver goods.

Some of the factors that influence your maritime insurance premium are insured goods, packaging of goods, insured risks, transportation, and travel.

10. Travel insurance

Overall, the function of travel insurance is not much different from that of regular insurance as a form of protection for customers with a short duration, namely as long as the premium buyer travels to return home.

The benefits and protection that can be obtained from travel insurance include protection and coverage of accidents affecting the premium purchaser, personal accident compensation, emergency medical expenses, repatriation of corpses, medical evacuation, protection against luggage that may be lost or damaged .

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