You must have heard the term insurance that he said can keep your property. But what exactly is insurance? And what kind of insurance?.
However, before discussing various types of insurance, it’s good if we discuss the meaning of insurance first.
Understanding Insurance
According to Wikipedia, insurance is a coverage or agreement between two parties, where one party is obliged to pay dues/contributions / premiums.
While the other party has the obligation to fully guarantee the payer of contributions/contributions/premiums if something happens to the First party or his property in accordance with the agreement that has been made.
The term insured usually refers to everything that gets protection. Meanwhile, if referring to the OJK website, insurance is an agreement between insurance service providers (as insurers) and the public (as policyholders).
The rights and obligations between insurance services and policyholders are regulated. Policyholders are entitled to protection for loss, damage, and death reimbursement from insurance service providers.
However, all rights will be obtained when the policyholder undertakes the obligation to pay premiums to the insurance company.
Insurance companies also benefit from investment. This profit is obtained from the premium investment received until they have to pay claims.
This money is called “float”. The insurer can benefit or lose from the changing price of the float and also the interest rate or dividend in the float.
In the United States, property losses and deaths recorded by insurance companies amounted to US$142.3 billion in the five-year period ending in 2003. However, the total profit in the same period was US$68.4 billion, as a result of the float.
Insurance Benefits
Insurance itself has many benefits. Therefore, not a few people who want to make insurance. Here are some of the benefits of insurance.
- Protect income from risks that come suddenly.
- Protect the money saved to realize future plans.
- Protect the family’s future when death comes.
- Protect physical and mental health when there is a risk of accidents.
- Provides future protection of the investment.
Insurance Principles
In the world of insurance there are 6 principles that must be met. Here is the full explanation.
Insurable interest
Insurable interest is the right to insure, arising from a financial relationship, between the insured and the insured and is legally recognized.
Utmost good faith
Utmost good faith is the act of accurately and completely disclosing all material facts about something that will be insured whether requested or not.
The meaning is: the insurer must honestly explain clearly everything about the extent of the terms/conditions of the insurance and the insured must also provide a clear and correct description of the object or interest insured.
Proximate cause
Proximate cause is an active, efficient cause that creates a chain of events that cause an effect without the intervention of a new and active source and independent.
Indemnity
Indemnity is a mechanism by which the insurer provides financial compensation in an effort to put the insured in the financial position he had shortly before the loss (KUHD Article 252, 253 and reinforced in Article 278).
Subrogation
Subrogation is the transfer of the right of demand from the insured to the insurer after the claim is paid. Contribution the right of the insurer to invite other insurers who equally bear, but not necessarily the same obligation to the insured to participate in providing indemnity.
Types Of Insurance
After discussing the understanding to the principles of insurance, then the next discussion is a variety of insurance.
Life Insurance
Some people think that this type of life insurance is the same as health insurance. Life insurance is a type of insurance that guarantees the death of an insured person by providing financial benefits.
There are some insurance companies that provide payment only after someone dies and there are also companies that provide payment before someone dies.
This type of insurance can be said to be insurance that can provide financial benefits when death comes, sudden illness, or suffering from total or partial permanent disability due to accident or illness.
There are services of insurance providers that impose a payment system after death. However, there are also those who allow policyholders to claim funds before their death.
