What is the insurance

Insurance is a form of financial protection that is in great demand by the people of Indonesia. However, even so, there are still many people who do not understand correctly what insurance is and how it works. In this article, we will discuss in full what is meant by insurance and some important things to know before deciding to buy insurance.

Definition of Insurance

Insurance is an agreement between the insurer and the insured to protect the insured from financial risks that may occur in the future. The insured party pays premiums periodically to the insurer, and if there is a risk guaranteed in the insurance policy, the insurer will provide compensation to the insured.

Insurance Types

There are several types of insurance that people can purchase, including:

Life insurance

Life insurance protects the heirs of the insured from the risk of loss of income due to death or permanent disability. The insured will pay premiums periodically, and if there is a risk guaranteed in the insurance policy, the heirs of the insured will receive compensation.

Health Insurance

Health insurance protects the insured from the risk of medical expenses due to illness or accident. The insured will pay premiums regularly, and if there is a risk guaranteed in the insurance policy, the insured will get reimbursement for medical expenses.

Vehicle Insurance

Vehicle insurance protects the insured from the risk of loss or damage to the motor vehicle they own. The insured will pay premiums periodically, and if there is a risk guaranteed in the insurance policy, the insurer will provide compensation according to the amount of loss or damage.

Property Insurance

Property insurance protects the insured from the risk of loss or damage to property such as a house or building that is owned. The insured will pay premiums periodically, and if there is a risk guaranteed in the insurance policy, the insurer will provide compensation according to the amount of loss or damage.

Advantages of Buying Insurance

There are several advantages to buying insurance, including:

Protect against Financial Risks

By purchasing insurance, the insured will be protected from financial risks that may occur in the future.

Reducing Financial Burden

If there is a risk guaranteed in the insurance policy, the insurer will provide compensation to the insured. This will reduce the financial burden that must be borne by the insured.

Provides a Sense of Security

By buying insurance, the insured will feel safer because he has been protected from financial risks that may occur in the future. This will provide peace of mind and reduce stress levels.

Things to Look For Before Buying Insurance

Even so, before deciding to buy insurance, there are several important things that need attention, including:

Check Insurance Company Reputation

Before buying insurance, be sure to check the reputation of the insurance company. Choose an insurance company that is trusted and has a good track record of providing compensation to the insured.

Understand the Terms of the Insurance Policy

Before buying insurance, be sure to understand well the terms of the insurance policy to be purchased. Understand well about the types of risks guaranteed, the amount of premium to be paid, and other provisions.

Adjust to Financial Needs and Capability

Before buying insurance, be sure to adjust it to your needs and financial capabilities. Choose the type of insurance that suits your needs and financial capabilities, so that there is no excessive financial burden.

Conclusion

Insurance is a form of financial protection that can help protect the insured from financial risks that may occur in the future. There are several types of insurance that can be purchased, including life, health, vehicle and property insurance. Before buying insurance, be sure to understand well the terms of the insurance policy and adjust it to your needs and financial capabilities. Thus, the insured can benefit from insurance without experiencing excessive financial burdens.