What Happens If Insurance Premiums Are Not Paid? These are the risks you should know about

Hello friends Summarized! This time we will discuss a topic that may often make you confused: what happens if insurance premiums are not paid? The insurance premium is the amount of money that you have to pay to the insurer in return for the financial protection they provide you. Insurance premiums are usually paid periodically, for example per month, per quarter, per semester or per year. However, sometimes we can forget or pay insurance premiums late for various reasons. For example, because they are busy, forget, run out of money, or even deliberately don’t pay because they feel they don’t need insurance anymore. What are the consequences if we do this? Can we still benefit from the insurance that we follow? Are there any fines or sanctions that we have to bear?

Risk If Insurance Premiums Are Not Paid

If you do not pay insurance premiums according to the agreement stated in the insurance policy, then you will face several risks that can harm you. The following are some of the risks that may occur:

• • Participation status is temporarily suspended . This means you cannot enjoy the services and benefits of the insurance that you participate in during the suspension period. For example, if you have health insurance and are late paying premiums, then you cannot claim medical expenses if you get sick or have an accident.

• • Insurance claim rejected . If you file an insurance claim while your membership status is suspended, the claim will be rejected by the insurer. This is of course very detrimental to you because you have to bear the costs yourself that should be borne by insurance.

• • fine . If you are late paying insurance premiums, then you have to pay a fine as compensation for the delay. The amount of the fine varies depending on the type and conditions of each insurance. Usually fines are calculated based on a percentage of the amount of premiums in arrears and the length of time late in payment.

• • Participation status is blocked . If you do not pay insurance premiums for a very long time or exceed the tolerance limit set by the insurer, then your membership status can be permanently blocked. This means you can no longer use the services and benefits of the insurance and must re-register if you want to join again.

Sample case

To clarify the above risks, let’s look at the following case examples: You are a class I member of BPJS Kesehatan with contributions of IDR 80,000 per month. You forgot to pay dues for three consecutive months (January-March). In April, you had an accident and had to be hospitalized at a total cost of IDR 20 million. What will happen?

• • Your membership status has been suspended since February 1 because you did not pay the January dues. You cannot use the BPJS Health card to get health services at the hospital.

• • You must pay a fine of 2.5% of the total medical expenses multiplied by the number of months in arrears. In this case, the fine you have to pay is IDR 1.5 million (2.5% x IDR 20 million x 3 months).

• • You must pay off all arrears of Rp. 240,000 (Rp. 80,000 x 3 months) plus a fine of Rp. 1.5 million. So, the total you have to pay is IDR 1.74 million.

• • You have to wait 45 days since your BPJS Health card is active again after paying off arrears and fines. If within that time you need hospitalization again, you will be fined again.

How to prevent late payment of insurance premiums

To avoid the risks mentioned above, there are several ways you can do so that you are not late paying insurance premiums, namely:

• • Pay insurance premiums automatically . You can take advantage of the auto debit facility from your bank account or credit card to pay insurance premiums automatically every month. That way, you don’t have to worry about forgetting or having the hassle of paying insurance premiums.

• • Pay insurance premiums online . If you don’t want to use the auto debit facility, you can pay insurance premiums online through an application or website from the insurance company. Usually the insurer will also provide notifications or reminders to you via email or SMS if the premium payment time is near.

• • Pay insurance premiums according to ability . Choose the type and amount of insurance premium according to your abilities and needs. Don’t force yourself to pay an exorbitant premium if it doesn’t fit within your income and budget. This can make it difficult for you to pay premiums and risk paying late.

Table of Comparison of Types and Amounts of Insurance Premiums

Insurance Type	Premium Amount	Benefit
Health Insurance	Starting from IDR 80,000 per month (BPJS Health) to hundreds of thousands to millions of rupiah per month (private health insurance)	Bear the cost of treatment and care if you are sick or have an accident
Life insurance	Starting from IDR 100,000 per month up to millions of IDR per month depending on age, gender, medical history and amount of coverage	Provide compensation money to heirs if they die or are permanently disabled
Property Insurance	From IDR 100,000 per year to millions of IDR per year depending on the value of the property and the risks covered	Cover losses due to damage or loss of property such as houses, vehicles or valuables
Education insurance	Starting from IDR 100,000 per month up to millions of IDR per month depending on age, gender, medical history and amount of coverage	Provide education money to children if parents die or are permanently disabled

Conclusion

The insurance premium is an amount of money that must be paid by the insurer to the insurer in return for the financial protection they provide. Paying insurance premiums on time is one of the obligations that must be fulfilled by insurance participants in order to get the benefits and services of the insurance. Thank you for reading up to here! If you have questions, please comment below! See you in the next article 😀