Get To Know Insurance Premiums And Their Types

Illustration. (Photo: Special)

JAKARTA - In the world of insurance there are many terms that you should know. There are policies, claims, customers, insurers, the insured, premiums, and many others. In this article, we will discuss insurance premiums.

As a prospective insurance customer, before submitting an insurance claim, you must know in advance what an insurance premium is which is also stated in the insurance policy.

The following is the definition of insurance premium in full details:

What is Insurance Premium

Premium is a sum of money (contribution) that must be paid by the customer as the insured party to the company as the insurer. That way the insurance company can be interpreted as a mandatory contribution for insurance customers paid to the insurance company.

The meaning of premium according to Law Number 40 of 2014 is an amount of money determined by the insurance company and approved by the policyholder to be paid based on an insurance agreement, or an amount of money determined based on the provisions of the legislation that underlies the mandatory insurance program to obtain benefits.

Are premiums expensive? Actually this is relative and depends on the financial capacity of the prospective customer.

Therefore, it is recommended for customers not to rush to sign the policy before knowing the amount of the premium.

However, there are also companies that give their customers the freedom to determine the amount of premium according to their ability. So in essence, the amount of premium that must be paid is in accordance with the ability to pay.

Insurance Premium Purpose

What is the purpose of the insurance premium? Here is a full explanation that you should know:

Cost Equalization

One of the goals of premium is cost distribution. The point is that with insurance, you don't have to bear the losses and risks yourself, but there are insurance companies who help alleviate them. Indeed, you will definitely pay the dues, but the amount is not too large because it is also covered by the insurance company.

Get Guaranteed Protection

After paying the premium, you will get guaranteed protection according to the selected insurance product.

Insurance Premium Type

Based on the types of insurance offered by insurance companies, premiums are still divided into several types, namely:

Health Insurance Premium

Health insurance premiums are premiums that must be paid to obtain health-related benefits such as outpatient, inpatient, doctor's consultation, surgery, dental care, childbirth, and so on.

The amount is adjusted to the limit of coverage paid by the insurance company. Generally, the cost of contributions for health insurance is in the range of Rp. 150 thousand and Ramayana Insurance is one of the many companies that offer health insurance.

Life Insurance Premium

Life insurance premiums are premiums paid by life insurance participants to the insurance company so that the heirs or beneficiaries can get the sum assured or compensation according to the agreement in the policy. Life insurance is insurance that is given to cover financial losses due to death.

The higher the sum insured, the greater the premium you have to pay.

Car Insurance Premium

Car insurance premiums are premiums paid by car insurance customers to get insurance benefits for car damage repairs, whether in part, in total, or lost. The premium amount depends on the type of car insurance.

As is known, car insurance is divided into two types, namely All Risk car insurance and Total Loss Only (TLO) car insurance. All risk insurance pays more than TLO because TLO insurance only pays about 75 percent of the damage.

Personal Accident Insurance Premium

This premium is paid by the participant or insurance customer to the company to obtain benefits in the form of compensation after an accident.

The cost of accident insurance is quite affordable, in the range of Rp. 160,000 to Rp. 170 thousand per year.

Travel Insurance Premium

Some insurance companies offer insurance products to people who like to travel or travel, namely travel insurance.

Travel insurance premiums can be interpreted as premiums paid by insurance customers to insurance companies so that they are entitled to coverage for disruptions, medical costs, hospitalization, to compensation money during the trip from leaving to returning home.

Thus a discussion of the meaning, purpose, and types of insurance that you should know. Always consider financial problems before deciding to choose insurance.