Definition of Insurance
"An agreement between the insurer and the insured, which requires the insured to pay a premium to provide compensation for the risk of loss, damage, death, or loss of expected profits, which may be suffered due to an unexpected event (insurance)." Financial Fervices Authority
"insurance (agreement between two parties, one party is obliged to pay contributions and the other party is obliged to provide full guarantees to the contributors if something happens to the first party or his property in accordance with the agreement made)." Indonesia Dictionary
"insurance"
What is Insurance?
Insurance is
an agreement between two or more people in which the insured party pays
contributions/contributions/premiums to obtain compensation for the risk of
loss, damage, or loss, which may occur due to unforeseen events. The term
insurance itself comes from English, namely "insurance" and Dutch,
assurantie or verzekering.
Insurance
cannot eliminate the risk of unexpected events, but insurance can reduce the
impact of losses arising from these events, whether on a small or large scale.
Now insurance has become part of financial planning for some people for the
long term.
Elements in Insurance
- Premium. Premium is an obligation paid by
the insured party to the insurer (insurance service provider) as a risk
transfer service. This premium payment must be repaid by the insured party to
be able to use the insurance benefits when needed.
- Insurance
policy.An insurance
policy is a legal document that forms the legal basis for the relationship
between the insured (customer) and the insurer (service provider/insurance
company). The policy acts as a basis for paying compensation for damages or
losses suffered by the insured. The policy is made by agreement and must be
made in writing.
- Claim.An insurance claim is an official
application submitted by a customer to an insurance company to make a payment
as a form of compensation for damage or loss based on the provisions of the
insurance policy. Before making the payment, the insurance company will check
the validity of the claim first.
Types of Insurance
Types of
Insurance in Indonesia include:
- Health
Insurance.Health
insurance provides protection with health and treatment costs for the insured
in the event of an accident or illness. This type of insurance is widely
provided by the company or agency where a person works.
- Life
insurance.Life
insurance covers the death of a person by providing financial benefits to the
insured for his death. When the insured dies, the policyholder will receive the
sum insured from the life insurance.
- Education
insurance.Education
insurance can be said as savings for the future in order to ensure the
education of children from the policy holder (the insured). This insurance has
become popular because of the increasing cost of education from year to year,
so it is not uncommon for parents to now have education insurance.
- General
insurance.General
insurance is protection against the risk of loss and loss experienced by the
policyholder. One of the well-known general insurance is Motor Vehicle
Insurance. This type of insurance guarantee is usually short term.