what is Insurance?

The word "Insurance" is certainly familiar to many people's ears. Even though the term "Insurance" is popular, the majority of the Indonesian population still does not have insurance.

Referring to data from the Financial Services Authority (OJK), the Indonesian public's understanding of the meaning of insurance and its uses is still minimal.

This is reflected in the level of insurance penetration or ownership by the Indonesian people. Looking at OJK data quoted by Bisnis Indonesia, July 2021, the insurance penetration rate in 2019 reached 2.81%. This figure increased to 2.92% in 2020 and 3.11% in June 2021.

This condition is caused by the public's lack of understanding when purchasing a policy and the insurance claim process. Another reason is also triggered by the various types of insurance offered by insurance companies. As a result, many people, especially those who are new to insurance, are confused about understanding the benefits of each insurance offered.

What is Insurance?

Before finding out the benefits of insurance, let's understand together the meaning of insurance. What is Insurance? Referring to the OJK website, insurance is an agreement between insurance service providers (as insurers) and the public (as policy holders).

The rights and obligations between insurance services and policy holders have been regulated. Where the policy holder has the right to receive protection for compensation for loss, damage and death from the insurance service provider. However, rights will be obtained when the policy holder fulfills the obligation to pay premiums to the insurance company.

From the definition of insurance, it can be concluded that insurance offers good benefits in minimizing risks that will come unexpectedly.

There are at least five insurance benefits that you can get, namely:

Protect income from sudden risks.

Protect the money saved to realize future plans.

Protecting the family's future when death comes.

Protect physical and mental health when there is a risk of accident.

Provides future protection of investments.