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When the COVID-19 pandemic occurs, itis very important to have additional protection such as insurance. Even so, thepublic's sense of trust and awareness of the importance of insurance is stilltoo minimal. At least in 2020, as reported by Bisnis.com (30/07/21), theinsurance penetration rate in Indonesia is still relatively low at only 3.03percent.

One of the causes of the low level ofinsurance penetration in Indonesia is that there are still many misconceptionsabout insurance circulating in the community. There are many misunderstandingsabout insurance that spread quickly by word of mouth even though what is statedhas not been proven true.

 

Misunderstandingof the Most Common Insurance

Here are 3 misconceptions aboutinsurance that are often circulated in the community:

1. Expensiveinsurance premiums

Many people consider insurancepremiums expensive. Whereas the nominal premium for each individual is not thesame because the nominal premium is determined based on several factors, suchas age, gender, health condition, and lifestyle.

In general, the younger a person'sage, the nominal insurance premium will be cheaper and vice versa, namely theolder a person is, the more expensive the insurance premium will be. This isbecause the determination of the nominal premium is based on the conditions ofeach individual and their needs.

If you are in good health and havenever suffered from any disease, it is likely that the premiums to be paid willbe more affordable. So it can be concluded that the nominal premium is notalways expensive and relative because it refers to various aspects.

 

2. Assuminginsurance is the same as savings

People often expect to get 'savingsresults' from the insurance premiums they pay every month.

If we look at the basic concepts ofinsurance and savings, then this assumption is not correct. The reason is thefirst, insurance aims to provide protection to a person from unexpectedfinancial risks so that financial goals can still be achieved despiteexperiencing risks in the course of time. While savings themselves have variouspurposes, such as savings, emergency funds, and others.

Furthermore, insurance can be 'liquid'or used to protect a person when exposed to financial risks, such as criticalillness, accident, and disability so that it is not expected to interfere withother financial goals, such as buying a house, children's education, andretirement funds.

By looking at the concept above, itcan be concluded that insurance and savings are different financialinstruments. This is because insurance does not function to prepare funds toachieve financial goals that customers can take for granted. But insurance ishere to provide protection and a sense of security from financial risks thathave the potential to cause big losses.

 

3. Claims must beaccepted

Many people think that whatever claimsthey put forward must be accepted, even though this point is not quite right.

Please note that when someone submitsa claim to an insurance company, there are several things that become the basisfor making a decision whether the claim will be granted or rejected.

In general, there are 3 factors thatform the basis of decision making. The first is pre-existing conditions. Ifsomeone submits a claim that turns out to be in a pre-existing condition orconditions that existed before having insurance, the insurance company is notentitled to pay the claim.

The second is the waiting period.Let's take an example, if someone submits a claim for cancer that is stillincluded in the 90-day waiting period, then he/she can only file the claim ifthe 90-day waiting period has expired. If the cancer claim is submitted beforethe waiting period is over, the claim will be rejected.

One important thing to know is thatthe claim will also be rejected even if it is submitted after the waitingperiod is over if the cancer is related to a pre-existing condition.

The third is the exception. On theexception, each insurance company has different points. If we take an example,if someone files an injury claim caused by a criminal act or crime, then theinsurance company is not entitled to pay the claim.

To avoid misunderstandings aboutinsurance above, here are some tips that one should do before choosinginsurance.

 

4 Tips forChoosing Insurance to Avoid Misunderstanding

1. Chooseinsurance according to your needs

To avoid misunderstandings aboutexpensive insurance premiums, you must choose an insurance plan according toyour needs. Be sure to review the financial flow so that the premiums paid donot interfere with your finances.

For example, when you choose healthinsurance and want to benefit from coverage areas other than Indonesia, thepremium paid will certainly be much more expensive than insurance with coverageareas in Indonesia alone. Therefore, understand your needs well before choosinginsurance.

 

2. Intend tochoose insurance for protection

The second is the intention to chooseinsurance as protection. What this means is that instead of expecting to getdisbursement of funds from insurance, you should use other financial instrumentsnamely savings to achieve financial goals such as raising an emergency fund,education fund, or investment.

This must be done because the basicconcept of insurance is to function as protection that will protect you fromfinancial risks such as critical illness, accidents, and disabilities that willcause financial losses in the future.

 

3. Understand thepolicy well

The policy does have thick pages andtakes time to understand. Even so, you still have to read and understand thepolicy carefully. This is done in order to avoid misunderstandings and to knowsome important points, such as exceptions, a list of special illnesses duringthe waiting period, and claims conditions.

 

4. Always discusswith Marketers

If you have any questions regardinginsurance, claim methods, benefit details, and so on, don't hesitate to discussthem with a Salesperson. Send questions to the sales force so that all yourdoubts are answered and you can choose insurance according to your needs.

To find out whether your Marketing Personnelis licensed or not, you can check on the AAJI website.

Those are 3 misconceptions aboutinsurance and the tips you should do when choosing insurance. Be sure to followthe tips above to get the best protection for you and your family.