KINDS OF INSURANCE

Insurance contributions are one of the most important needs if you want to have stable and healthy personal finances. In addition to adequate emergency funds, ownership of protection is something we try not to procrastinate. By having insurance, direct finances can be protected from the risks of loss that may occur when dealing with a condition that requires large costs. For example, when you fall ill and need a medical card or when the backbone of your family dies as a result of an accident, your family income stops.

The pandemic conditions make the need for insurance even more relevant. The risk of contracting infectious diseases and the risk of death that threatens to make insurance a crucial effort to maintain physical and financial health as well as mental comfort in addition to social distancing. So, if you are currently considering buying insurance premiums, try to identify the key words in the premium first.

1. Insurance policy

Premium policy is a word to refer to a written cooperation agreement contract between the insurance premium provider (premium insurer) using the policyholder's customer. All premium contracts, whether it's life insurance contributions, health premiums to loss coverage contributions, are called premium policies.

The content of the cooperation agreement contained in the insurance contribution is an agreement that the premium provider is willing to bear the risk of the insured whose name is stated in the policy, within a certain period according to the agreement. To receive premium protection from the premium provider, the policyholder must pay a certain amount of insurance premium that has been agreed upon.

The insurance policy also contains the general terms of the policy, details of the rights and obligations of the provider of insurance contributions, the policy holder, the range of premium benefits provided, the article that mentions the exclusion of protection, the article that mentions things that can cancel the policy. In addition, the premium policy is generally attached with the sheet of coverage, special conditions, as well as a copy of the premium application letter (letter of claim).

Insurance policies include important documents that have legal force. Therefore, you must save it in a special area that you can easily access whenever needed, for example when you want to claim insurance.

2. Insurance coverage fee

To receive insurance protection, the policyholder must pay a certain amount of coverage to the insurer. Insurance premiums are defined as a number of payments determined to be a portfolio of risk transfer from the policy holder to the insurance provider. The premium amount is influenced by the insurance contribution provider and is agreed upon by the policyholder. The size of the insurance will be determined by a number of factors. Among other things, the coverage of protection provided by the provider of insurance contributions, the age of the insured, the insured's lifestyle or medical record, gender, and the insured's occupation sector.

The more complete and broad the coverage of an insurance contribution, the premiums are generally more expensive. Likewise, if the insured premium is considered to have a high risk, the premium is automatically more expensive. Policyholders are generally given the choice of the timing of insurance payment options. These are: monthly insurance contributions, quarterly coverage contributions, semester or annual premium payments.

3. Insured

The word "insured" in a premium policy refers to the person or party who obtains collateral for compensation from the premium provider when the risk referred to in the policy occurs. In a life insurance policy, the insured means the head of the family or family member who has economic value. In health premiums, the insured can afford anyone such as employees, children, wives, parents, and so on. Thus, when there is a risk covered in the policy, the insured receives compensation. The model, when the head of the family who is the insured in the global life insurance policy dies, the sum insured for the life insurance contributions will be given by the premium provider to the beneficiary who has been appointed in the policy.

The insured is not the same as the policyholder. An insured is not necessarily a policyholder. For example, as the head of the family, you buy a health premium, then you are claimed to be the policyholder and the insured. The children and wives you insure are also called the insured.

4. Premium benefits

Premium benefits mean the protection that the insured gets and is provided by the insurance company. For example, a health coverage contribution conveys a portfolio of medical care benefits, outpatient costs and surgical benefits. That means, when the insured falls sick and requires treatment, the insurance contribution provider will provide reimbursement for medical care costs.

There are also insurance benefits in the form of compensation and benefits such as those in the hospital cash plan type of health insurance contributions. While the life premium, insurance benefits are in the form of sum assured. The sum assured (up) is the amount of funds that will be disbursed and given by the insurance provider to the heirs or beneficiaries appointed on the policy, when the insured dies.

5. Claim

Claim means a claim made by the policyholder to the insurance contribution company as the guarantor of the insurance contribution, to fulfill the policyholder's rights as stated in the policy. The practical model, you have a health premium that covers typhus disease benefits. When one day you fall sick and have to be treated at a hospital because of typhus, then you can file a benefit claim to the insurance contribution provider. The insurer will pay financial compensation in the form of inpatient fees and other costs according to the definition of benefits stated in the premium policy.

Contribution providers generally limit the period when insurance claims. For health insurance, for example, the insurer gives the time of claiming aporisma 30 days after the insured performs treatment.

6. Acquisition cost

This term refers to the fee that must be paid by the policyholder to obtain services as an insurance customer. In addition to the "acquisition costs", the same costs are generally considered to be the policy issuance fee. The cost of issuing a policy includes the cost of paying insurance agent fees and operating costs for premium companies.

7. Lapse

The policy holder is required to pay a premium to the insurance provider according to the agreement in the policy, so that insurance benefits can still be obtained for the duration of the contract. So, if the policyholder does not pay the required insurance, it exceeds the grace period (usually 45 days), then the premium policy that is owned will be automatically canceled or lapsed. Avoid canceling the policy by ensuring that premium payments are made on time according to the payment term you have chosen.

Lapse makes insurance protection you can't get. When a risk occurs when the insurance contribution lapses, the insurance provider is no longer responsible for the loss.

8. Cash value

This word is usually found in unit-linked life insurance or endowment coverage. Cash value is the amount of money that can be redeemed by the policyholder at a certain time. For example, in end-of-life insurance premium products such as education premiums, there is generally a cash value that the policyholder can disburse when the policy is three years old, 6 years old and so on.

In unit-linked life insurance, which is a life premium that has both protection and investment features, the cash value means that there will be an investment formed from investment business costs that are routinely deposited by the policyholder.

9. Additional premium (rider)

This is the word to describe the additional benefits that you can include in the basic premium program. Riders usually have lower insurance premiums because they are complementary to the main insurance premium. As a model, life premium products are generally equipped with riders in the form of health premiums, critical illness insurance or waiver of premiums.

Only, you need to remember, the more riders you take, the wider the insurance benefits you feel. That brings consequences in the increasingly expensive premiums that you have to pay.

10. Premium holiday (premium holiday)

Coverage coverage refers to a certain period of time during which the policyholder is allowed not to pay insurance or stop paying premiums without losing the benefits of the insured contribution. Perlop premium actually does not mean the policyholder does not pay for insurance at all. Insurance dues leave is possible in insurance that has investment features such as unitlink. When the insurance premium leave is carried out, the insurer actually uses the cash value that has been formed from unit-linked investments, to cover insurance costs. Insurance dues leave is possible if the cash value of a policy is sufficient to cover the insurance contribution portfolio.

So if the cash value that has been formed is not sufficient to pay the insurance premium, then the policyholder must return the insurance premium or top-up his investment so that the benefits of the permanent insurance premium apply and avoid lapse.

Well, those are 10 crucial terms on premiums that you need to understand and can be a guide so that you can better know the origin of the insurance premium product that you will or have purchased.