Don’t Overlook These 4 Tips for Choosing the Right Insurance

 

When considering how to choose insurance, it is important to follow key tips for choosing insurance to maximize your insurance benefits

Health has become an invaluable asset, especially during the COVID-19 pandemic. Just like having a home, having insurance is equally crucial. To obtain the most comprehensive insurance benefits, it’s essential to know how to choose the right insurance.

Taking care of health and fitness involves not only maintaining a balanced diet, regular exercise, and adequate rest. Despite these efforts, unexpected health issues and premature death can still occur. Hence, protecting yourself and your family with insurance that offers extensive benefits at affordable premiums is vital.

Here are some tips for choosing the right insurance:

1. Conduct Research on Insurance Products

In Indonesia, insurance companies offer at least ten types of insurance products, including life insurance, health insurance, accident insurance, home insurance, vehicle insurance, education insurance, loss insurance, travel insurance, pension insurance, and sharia insurance. Each type provides different coverage benefits. For example, term life insurance offers protection for a specific period, such as 5 or 10 years.

Another type, endowment life insurance, combines term insurance and savings benefits. Meanwhile, unit-linked life insurance provides both life protection and investment benefits.

2. Purchase Insurance That Meets Your Needs

Before deciding, identify which insurance suits your needs and financial capability. If you need insurance that offers both life protection and investment, choose a unit-linked life insurance product over endowment life insurance. This is because endowment insurance does not provide investment benefits, and vice versa.

First, determine what kind of insurance you need, then match it with your financial ability to pay the premiums.

3. Consult Licensed Insurance Agents

If you have doubts about the coverage benefits of a particular insurance product, directly consult a licensed insurance consultant or agent. They can address all your questions and concerns. Many people hesitate to ask questions and end up with unresolved doubts.

4. Understand the Chosen Insurance Thoroughly

Before signing the Life Insurance Request Letter (SPAJ) or Health Insurance Request Letter (SPAK), ensure you fully understand the chosen insurance product. Know the extent of coverage benefits, how to claim them, the payout process, and the monthly premium payment procedure.

Ensure that you clearly understand these aspects before signing the SPAJ or SPAK.

Additional Tips: Check the Insurance Company's Track Record

Apart from researching insurance products, it is crucial to investigate the insurance company's track record. The key factor to consider is the company’s solvency or risk-based capital (RBC). RBC is a method to determine if an insurance company is financially healthy enough to meet all its obligations.

The Financial Services Authority (OJK) mandates that all insurance companies disclose their RBC level to customers. For instance, Prudential had an RBC of 428% in the second quarter of 2021, which is three times higher than the minimum internal target, despite the ongoing pandemic.

Knowing the RBC level and the financial health of the insurance company you choose to trust with your and your family’s protection is crucial.

By applying these four tips, you can confidently choose the right insurance that suits your needs. If you are certain about your insurance choice, don’t hesitate to move forward.

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