The Terms In Insurance Must Be Known By New Owners

Illustration of insurance (Unsplash)

YOGYAKARTA When deciding to have insurance, the public is advised to start recognizing the terms that are often used in the world. Knowing the terms in insurance will make it easier for you to understand insurance service products in depth.

Knowing the term insurance will help you choose insurance appropriately and prevent you from unwanted things.

The terms used in the insurance world are mostly English. However, there are also terms that have been absorbed from foreign languages into Indonesian. To get to know more the term in the insurance world, see the following list of words, quoted from various sources.

In the Big Indonesian Dictionary (KBBI), the policy is defined as a letter of agreement between people who participate in insurance and insurance companies. The term policy is indeed defined as a cooperation contract that is realized in writing between an insurance company and a customer.

The term policy applies to various types of insurance such as life insurance, education, health, and so on. The policy contains various information, including listing rights and obligations.

In the Big Indonesian Dictionary (KBBI), the meaning of the insured word has some meaning, one of which is the person who shifts the risk to other parties based on the policy by paying the premium.

Citing the official OJK website, the insured party is the party who bears the risk as regulated in the insurance policy or insurance agreement. It must be noted that the insured is not the same as the policyholder. A insured person is not necessarily a policyholder. For example, you buy life insurance for your wife and children. You will hold the policy but those who are covered are children and wives who do not need to hold the policy.

The meaning of premium in KBBI is the amount of money that must be paid at a certain time to insurance. Premiums can also be interpreted as payments that are set as costs for transferring risks from Policyholders to Insurance Providers. The amount of premium to be paid is usually determined by companies that provide insurance which is then agreed upon by the issuance of policies.

Lapse is a term that refers to the condition of default by policyholders that are not carried out according to the contract or policy.

For example, as a policyholder, you are required to deposit premiums to insurance provider companies according to the agreement listed in the policy so that you can receive insurance benefits. But one day you don't pay the premium until it exceeds the grace period (Grace Period), the insurance policy that has been issued automatically is canceled or the lapse.

This term refers to additional benefits in insurance. For example, life insurance usually has or offers riders in the form of health insurance even if or insurance in critical diseases. The existence of this rider will affect the amount of premium that must be paid by policyholders. If the rider taken by the policyholder has a lot, then the premium paid will be even greater.

In the insurance world, the term claim is the claim of rights by policyholders to insurance companies. For example, you have health insurance. So when you are sick, you as a policyholder can file a claim when you are hospitalized. Claims in the form of hospitalization and treatment replacement fees while in the hospital are in accordance with the rules that have been agreed upon.

The six terms in this insurance appear quite often, so it is necessary to understand. Visit VOI.ID to get other interesting information.