Type Of Insurance

As general person like us know, insurance just help and protect us from a house fire, car accident and robbery. even though there are so much things that insurance company can cover from our losses.
So, today i will share to you types of insurance. Because it'll help you to choose some of insurance that worth it and you really need.

1. Home insurance
Home insurance is insurance that will covers the cost of repairing your house if it's damaged by storm, fire, and bloods. but you can't claim if your house damaged by general wear.

2.Transport insurance/Car insurance
Car insurance will cover us from an accident cost, cover losses of a small or big accident or cover your car if it stolen.

3.Travel insurance
Travel insurance will give you some money if there's an injury, loss of limbs, or the total cost of accidents occurring on the way. and if there are loss and damage to your baggage, including the stuffs in it or the stuffs you use during the trip, travel insurance will provide compensation.



4.Health insurance
Health insurance is an insurance product that handles health problems because of an illness and bear the cost of the treatment process.

5.Bussiness insurance
Business insurance cover the damage stuffs, lose stuffs, or loss in large quantities that might happen in someone business.

6. Credit insurance
Credit insurance help to protect you from risk of failure of debtors to pay off credit facilities or cash loans such as trade credit, and others.

This is how the insurance company Works

This is how the insurance company Works

How insurance works: Helping others clients who got disasters
Insurance business is a business taking over risk from customers to be certified by insurance companies. How to cover the risk is by use the accumulated premium funds paid by customers to cover the clients  who got disaster.

take the example of merchants association there are 100 people who joined in insurance by paying Rp3 million. The accumulated total premium collected is Rp300 million. It is estimated that from 100 traders, there are five people affected by the disaster with losses of Rp50 million each so that the total loss is Rp250 million.

Insurance companies that act as risk insurers use the accumulated premium to cover the risk of affected traders. But, the unaffected can't get dependent from the insurance company.

Working Process of Insurance Company
The work process of the insurance company uses three simple steps:

1. Attracting Customers

Insurance companies offer products and look for someone who will become a customer. The insurance company will divide each insurance buyer or policyholder into different sections.

So, if you use health insurance, it will not be mixed with life insurance or anything else. Insurance will cover your losses.

2. Collecting Premiums

Customers will be given a schedule of premium payment which is you need to pay every month. Through this premium payment, the amount of money from each customer will be processed to overcome the problems experienced by other customers and who make claims to the insurance company. So, the system of the insurance company is repeats the rotation of money from customers to cover the risks experienced by other customers.

3. Paying Claim

If there is a claim from a customer that got disaster, the insurance company shall pay in accordance with the condition. The insurance company will make sure that the incident of the customer's claims is really a disaster and not a deliberate incident. In the policy clause, there is usually an agreement that if the incident has intentional elements, the compensation will not be granted by the insurance company.

How Does the Insurance Company Glance at Risk Management Business?
Some system work and how to manage risk by this insurance company you need to know.

1. The customer is officially registered as a participant of the insurance program after signing the agreement as outlined in the form of an insurance policy.

2. The registered customer insurance program is required to pay the premium. All premiums from customers will enter the insurance pool. New or old members of the status are the same, that is promised insurance companies will be paid a sum of money if the insured losses occur, as long as the premiums that become obligations have been paid.

3. Join the insurance program like buying big money with small money. That is, risk can happen anytime. You could just join the insurance program yesterday and today there is a risk then you can claim. These benefits can be obtained from the insurance program.

4. The insurance company will consider every risk of the product being run by collecting data and making it in the form of risk statistics that contain:
- Predict the number of people who will actually file a claim within a period. Insurance companies must be careful to estimate the number of people who will experience a loss in the first year, the next year, and then.
-Predict the number of customers who do not claim within a period so that the insurance company can pay a claim that is much larger than the premium money received from the policyholder.
-Detailed customer information statistics can be grouped according to risk characteristics to calculate premium rates based on risk groups. The term is a classification of risk or underwriting. By imposing risk-based premiums, insurance companies can act fairly to all policyholders.

4th Mistake When You Buy Life Insurance

If you are planning to buy life insurance, this is the four mistakes to avoid :

1.Do not know the need for the sum insured

Many people simply buy life insurance without first calculating how much money they really need.

As a result, when there is a risk, the sum assured is not sufficient to cover the financial needs of the family. Know in advance how much money your life insurance needs so you can find the right product.

How to know the needs of life insurance money you can calculate with the approach of Human Life Value, with the formula of the multiplication between the current income value plus risk free rate.

For example, your current income is Rp 10 million per month and your dependents can be independent for another 20 years. Assume a risk free rate of 5.2 percent. Therefore, the life insurance coverage is Rp 10 million x 12 months x (110 percent + 5.2 percent) x 20 years = Rp 1.42 billion.

After knowing the money needs of insurance, you just look for life insurance products with the value of Sum Insured (UP) for it. You can weigh the term life product or pure term life insurance which the price of the premium is still reasonable with the value of the UP is large enough.


2.Purpose insurance as an investment

As for insurance, one thing you need to keep in mind is that insurance is a cost. Insurance is not an investment where you can expect big returns someday.

Conversely, insurance is a cost because in principle insurance is a scheme of transfer of risk to a third party of insurance companies.

The insurance company will pay a certain amount of compensation or sum insured when there is a risk to the insured or the policyholder.

The policyholder is required to pay the premium as the cost of transferring the risk to the insurance company.

Life insurance can not prevent death. However, life insurance can alleviate the financial burden of family members left behind when the breadwinner dies.

One consider insurance as an investment product can lead you to choose life insurance products that are less precise. Like buying life insurance combined with investment. As a result the premium is quite expensive, while the sum assured is relatively small. So be smart in choosing the best.


3. Set the insured in the policy

In insurance, the insured is he who is assumed the risk of his soul by the insurance company. Thus, when the insured dies, then the insurance company will pay a sum of money that is entitled to be given to the appointed heirs.

Who ideally becomes the insured in life insurance products? In accordance with the purpose of purchasing the financial risk management of the family, the insured life insurance should be those who have economic value or the party that became the source of family income.

For example, husband, wife, or both. When husband and wife work together, the insured should be the party with the greatest income because the financial risk is also greatest for the family if he suddenly dies.


4.Don't buy proper supporting insurance

Usually when you buy life insurance, insurance agents will also offer complementary insurance or riders. Don't just add extra insurance before calculating first what your needs.

Additional insurance also means additional costs, then it is wise in adding the types of riders. If necessary, for life insurance you can consider adding it with a waiver of premium or premium waiver.

These riders are useful to anticipate the risk of incompetence which results in you being unable to pay regular premiums. For example because of an accident that makes you lose your job, you will be exempt from life insurance premium payment.

The Benefit Of Insurance

Here are the benefits of signing up for insurance that you will get in general or overall.

1. Giving Tranquility

We never know the possibility of what will happen tomorrow. Every day we pass by the possibility of events that could require unexpected expenses. If you include someone who is ready for something, the risk of losses caused by these unexpected events can be minimized easily. But what about you who realize that you are not the type of person like that? The presence of insurance service providers can provide answers and lighten the burden when the unexpected events came.

Insurance has the benefit of providing protection from the risk of uncertainty and is believed to be more able to increase the confidence for the individual holder. The reimbursement to be provided by the insurer will at least partially cover up to all of your payment obligations for an event. Insurance is also known as an alternative to loss control or loss control by conducting field surveys as well as providing recommendations to policyholders to perform preventive and mitigating actions.


2. as an investment and savings

By registering as a policyholder customer in an insurance service provider, you will be guaranteed a return on investment at the end of the contract. Insurance intended for investment also provides flexibility and flexibility in choosing the coverage period. Usually there will be three choices of coverage time of policyholders, 5, 7, and 10 years. In addition, the premium is a single premium that is relatively affordable and can be exempt from administrative costs.

3. Help you to reduce losses

In accordance with their respective types, the function of insurance ownership in general is to help policyholders to minimize losses from possible unforeseen events such as the cost of disaster losses, accidents, and hospital costs. Minimize the losses for these unexpected events can be seen from the following case example:

You are someone who has a house worth Rp3 billion. In addition, you also have an investment in the form of buildings used as rental rooms for students in the area around the campus. You only give more protection to your home while not for the boarding house owned. When there is a fire caused by a gas explosion at home, you can get cover fees from the insurer. Meanwhile, if the fire occurred in your boarding house, you will lose big losses due to loss of buildings and must bear the loss of property belonging to students because of a fire caused by a gas explosion that is actually yours. From this it is seen the importance of having insurance as a guarantee of protection either for yourself or for your property and investment.

4.Help you to manage financial
Your obligation to pay premiums on a regular basis actually indirectly forces you to provide a reserve fund that is used when an unexpected event occurs. However, when the unexpected event actually happens and requires you to spend a lot of money to cope with it, the insurance will help you to reduce unexpected expenses that are usually much higher than your daily or even monthly routine expenditure. By having insurance, you do not have to pay the full cost of the losses suffered because the insurer will provide compensation.