Here are 3 Misunderstandings about Insuranceand Tips in Choosing Insurance

Here are 3 Misunderstandings about Insuranceand Tips in Choosing Insurance

Let's Understand Pre-Admission on Health Benefits in Your Policy to Get Guaranteed Early Coverage from Insurance Providers

When the COVID-19 pandemic occurs, it is very important to have additional protection such as insurance. Even so, the public's sense of trust and awareness of the importance of insurance is still too minimal. At least in 2020, as reported by (30/07/21), the insurance penetration rate in Indonesia is still relatively low at only 3.03 percent.

One of the causes of the low level of insurance penetration in Indonesia is that there are still many misconceptions about insurance circulating in the community. There are many misunderstandings about insurance that spread quickly by word of mouth even though what is stated has not been proven true.


Misunderstanding of the Most Common Insurance

Here are 3 misconceptions about insurance that are often circulated in the community:

1. Expensive insurance premiums

Many people consider insurance premiums expensive. Whereas the nominal premium for each individual is not the same because the nominal premium is determined based on several factors, such as age, gender, health condition, and lifestyle.

In general, the younger a person's age, the nominal insurance premium will be cheaper and vice versa, namely the older a person is, the more expensive the insurance premium will be. This is because the determination of the nominal premium is based on the conditions of each individual and their needs.

If you are in good health and have never suffered from any disease, it is likely that the premiums to be paid will be more affordable. So it can be concluded that the nominal premium is not always expensive and relative because it refers to various aspects.


2. Assuming insurance is the same as savings

People often expect to get 'savings results' from the insurance premiums they pay every month.

If we look at the basic concepts of insurance and savings, then this assumption is not correct. The reason is the first, insurance aims to provide protection to a person from unexpected financial risks so that financial goals can still be achieved despite experiencing risks in the course of time. While savings themselves have various purposes, such as savings, emergency funds, and others.

Furthermore, insurance can be 'liquid' or used to protect a person when exposed to financial risks, such as critical illness, accident, and disability so that it is not expected to interfere with other financial goals, such as buying a house, children's education, and retirement funds.

By looking at the concept above, it can be concluded that insurance and savings are different financial instruments. This is because insurance does not function to prepare funds to achieve financial goals that customers can take for granted. But insurance is here to provide protection and a sense of security from financial risks that have the potential to cause big losses.


3. Claims must be accepted

Many people think that whatever claims they put forward must be accepted, even though this point is not quite right.

Please note that when someone submits a claim to an insurance company, there are several things that become the basis for making a decision whether the claim will be granted or rejected.

In general, there are 3 factors that form the basis of decision making. The first is pre-existing conditions. If someone submits a claim that turns out to be in a pre-existing condition or conditions that existed before having insurance, the insurance company is not entitled to pay the claim.

The second is the waiting period. Let's take an example, if someone submits a claim for cancer that is still included in the 90-day waiting period, then he/she can only file the claim if the 90-day waiting period has expired. If the cancer claim is submitted before the waiting period is over, the claim will be rejected.

One important thing to know is that the claim will also be rejected even if it is submitted after the waiting period is over if the cancer is related to a pre-existing condition.

The third is the exception. On the exception, each insurance company has different points. If we take an example, if someone files an injury claim caused by a criminal act or crime, then the insurance company is not entitled to pay the claim.

To avoid misunderstandings about insurance above, here are some tips that one should do before choosing insurance.


4 Tips for Choosing Insurance to Avoid Misunderstanding

1. Choose insurance according to your needs

To avoid misunderstandings about expensive insurance premiums, you must choose an insurance plan according to your needs. Be sure to review the financial flow so that the premiums paid do not interfere with your finances.

For example, when you choose health insurance and want to benefit from coverage areas other than Indonesia, the premium paid will certainly be much more expensive than insurance with coverage areas in Indonesia alone. Therefore, understand your needs well before choosing insurance.


2. Intend to choose insurance for protection

The second is the intention to choose insurance as protection. What this means is that instead of expecting to get disbursement of funds from insurance, you should use other financial instruments namely savings to achieve financial goals such as raising an emergency fund, education fund, or investment.

This must be done because the basic concept of insurance is to function as protection that will protect you from financial risks such as critical illness, accidents, and disabilities that will cause financial losses in the future.


3. Understand the policy well

The policy does have thick pages and takes time to understand. Even so, you still have to read and understand the policy carefully. This is done in order to avoid misunderstandings and to know some important points, such as exceptions, a list of special illnesses during the waiting period, and claims conditions.


4. Always discuss with Marketers

If you have any questions regarding insurance, claim methods, benefit details, and so on, don't hesitate to discuss them with a Salesperson. Send questions to the sales force so that all your doubts are answered and you can choose insurance according to your needs.

To find out whether your Marketing Personnel is licensed or not, you can check on the AAJI website.

Those are 3 misconceptions about insurance and the tips you should do when choosing insurance. Be sure to follow the tips above to get the best protection for you and your family.



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