Understanding Insurance Policy and How to Choose the Right Policy

Understanding Insurance Policy - Insurance is a fairly complex thing, where you will need careful understanding and consideration before using it. Although insurance is no longer a thing that sounds foreign to our ears, in fact until now there are many people who do not understand the ins and outs of insurance.

insurance policy components you need know

It is certain that this lack of understanding will ultimately reduce the interest of most people to use it. In Indonesia itself, the development of insurance is quite good and encouraging, this can be seen from the large number of insurance companies that provide services and can survive to this day such as life insurance service providers and well-known health insurance services.

Well-known insurance companies such as Prudential, Allianz, Sinarmas, AXA Mandiri, and Cigna are examples of the best insurance service providers in Indonesia The number of insurance users in Indonesia also shows an increase from year to year, public awareness of the importance of protecting their life and assets is getting higher and makes they choose to use insurance services.

This is also of course supported by the many types of insurance that can be selected and adapted to the needs of the community at large, so that people can easily choose and use certain types of insurance that are most appropriate for them.

Definition of Insurance Policy

As we know, insurance has many different terms than we usually hear. This of course can create a wrong understanding and give rise to various inaccurate assumptions.

Before using insurance services, you should really understand correctly the various terms used there, so you don't misinterpret them in the future. Do not let you use insurance services without clearly understanding the various terms used in it.

One of the terms we hear most often in insurance is an insurance policy. There are many people who think that an insurance policy is a number of funds that will be paid to an insurance company every month (premiums), this is of course very inappropriate because there is a very large difference in meaning between insurance premiums and insurance policies.

An insurance policy is a proof of a written agreement made by the insurance company (the insurer) with the customer using the insurance service (the insured), the contents of which explain all the rights and obligations between the two parties. The insurance policy will be valid written evidence in the agreement made by the insurer and the insured.

With the existence of an insurance policy, both parties who enter into the insurance agreement will be bound and have their respective responsibilities as agreed from the start. Insurance policies are very important in the insurance service itself, because the policy will protect every right and obligation of the customer and the insurance company.

Functions of an Insurance Policy

Given the importance of an insurance policy, it is only natural that you have to understand the entire contents of the insurance policy you have. This will prevent you from a number of losses that may arise in the future due to your lack of understanding of all the details written in the insurance policy that you use.

For both parties between the insured and the insurer, insurance policies have their respective functions, namely:

Policy function for customers who use insurance (the insured):

To become written evidence of insurance coverage for various risks and compensation for losses that may occur to the insured, where such losses written in the policy
Become a proof of payment of the premium given to the insurance company as the person
Become evidence of the most authentic to sue the insurer, if at any time negligent or did not meet the collateral dependents

function of policy for the insurance company (insurer):

Become evidence or receipt of insurance premiums paid by the insured
Be a written evidence of the guarantee given to the insured to pay compensation that may be suffered by the insured
Be the most authentic evidence to reject the claim for compensation or claims submitted by the insured, if the cause of loss n does not meet the requirements of the policy that is owned

How to Choose the Right Policy

There are many types of insurance offered by the insurance company, this is done with one goal, namely to get a larger number of customers and higher profits. With this large number, you as a customer also have many choices that you can adjust to your needs.

Every insurance company will of course have their own policies that they apply to the insurance products they sell. All of these things you will find in the insurance policies they offer, this is what then becomes very important for you to look at from the start, because there are many cases where there are disputes due to the wrong understanding of the policy from insurance service users.

If you can't understand every detail contained in the policy, then it's a good idea to ask for an explanation from a third party, in this case usually the service used is an insurance broker. An insurance broker can explain and help you choose an insurance product that is most appropriate and that you really need, so you won't waste money buying an insurance policy that doesn't have the maximum benefit for you.

In practice, insurance companies will be very detailed in making the contents of the insurance policies they sell. However, the opposite actually happens to customers who will use the insurance, where there are lots of people who are too lazy to read the insurance policy they will buy. If this is the case, then when and how will you understand the contents of the entire insurance policy?

It is very important to read and understand the contents of the policy properly, before you buy it. Here are some ways that you can consider in getting the right insurance policy:

1. Adjust to Your Needs

There are many types of insurance services issued by insurance companies, this is of course directly proportional to the number of policies they offer. As a prospective customer, it will be very important for you to really understand the type of insurance you need. Don't buy insurance that you don't need at all, it's just a waste of money.

Example: you already have pure health insurance, but because you are interested in a unit link health insurance product, you use it too. While the two insurances do not allow you to make a double claim, the use of unit-linked health insurance is useless. If you really want to invest, then you can do it separately from insurance services (pure investment).

2. Use the one that accepts double claims

When you use two health insurance services at once (for example, one office facility and the other personal funds), then try to use a health insurance service that can double claim, where your personal insurance can be claimed only by using a photocopy of the receipt issued by the hospital. This will give you the maximum benefit from using the insurance.

3. One Policy for One Family

There is an insurance service that allows you to use one policy simultaneously with other family members. This is much more economical, where you only have to pay for one policy for the whole family.

4. Understand the Terms and Conditions

There are many things written in an insurance policy, one of the most important things for you to pay attention to is the conditions for submitting a claim. Although each company has different provisions, the following are standard provisions that you must understand from the start:

The premium calculation system that is applied and the amount of premium you have to pay

Types of coverage that can be claimed, such as: hospitalization requirements, choice of hospital/clinic , types of hospital services that can be claimed (room fees, doctor services, medicines, and others).

Choose and Use the Most Appropriate

In choosing an insurance policy, then you must understand the type of insurance you need. Choose insurance services from an insurance company that is credible and trustworthy, so you can get the best service from them.

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