Myths vs Facts: 4 Misconceptions About Insurance

In Indonesia, not many people realize the importance of having insurance to protect against life and financial risks. This can be seen from the low number of people who have insurance compared to the Indonesian population, which is only around 1.2 percent. According to AAJI, in 2020 the average amount of public insurance expenditure will only be IDR. 761,760.00. This figure is of course far behind compared to our neighboring countries.

Apart from the low penetration rate, public knowledge about insurance products is also still lacking. There is a lot of confusing information circulating about insurance, which ultimately makes us wonder about the truth. In this article, we will discuss myths vs facts to avoid misunderstandings about insurance .

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Myths vs Facts Regarding Insurance Questions

1. Premium Price

Myth: Insurance premiums are expensive

This assumption makes most people hesitate to buy insurance products because they feel that the premiums they have to pay are too expensive.

Fact: Relative Premium Prices depend on needs

In fact, no insurance premium is too expensive compared to the benefits offered. Basically, the amount of premium we have to pay each period has been calculated by the insurance company and adjusted to our needs. Apart from that, the premium amount is also influenced by several factors such as:

• Insurance object. Do we insure inanimate property or life?
• If the object of the goods is dead, then transportation to carry the goods, the condition of the goods, and the market price of the goods will be taken into consideration.
• If the object is life, then the amount is influenced by the health history, type of work, age and gender of the insured customer
• The type of policy taken and the coverage period.

Therefore, the amount of insurance premium that must be paid can be said to be relatively dependent on these factors. So, we cannot generalize.

2. Insurance Ownership

Myth: Insurance is only for old people

There is an idea that insurance is only for those who are elderly and have major health risks.

Fact: Young people can also have insurance

Insurance is not only for the elderly. In fact, it is actually better to have insurance when we are young because the premiums we pay will be cheaper than when we are middle-aged. When we are young and healthy, the risk of health problems occurring in the near future is much smaller. Therefore, having insurance when we are young will benefit us much more in the future.

Also Read :  Recognize Insurance Needs Based on Life Phase

3. Insurance Claims

Myth: Insurance Claims are Difficult

Many people doubt the benefits of insurance because they think the claims process will be complicated or rejected by the company

Facts: Claims Are Granted According to the Terms

Before making a claim, we need to first understand the provisions stated in the policy. When we submit a claim, the insurance company usually has several bases used to determine whether it will be accepted or rejected. One thing that influences is whether or not there is a pre-existing condition . Pre-existing condition can be literally translated as “pre-existing condition”. In insurance, this condition shows that there is a medical illness or injury that was experienced before signing the policy.

Well, some insurance companies cannot grant our claims if we have a pre-existing condition . So, make sure we really read and understand the policy before signing it.

Apart from that, the insurance claim process is now easier, namely it can be done online . The online claim process can be carried out in three simple ways, namely filling in customer identification data, selecting claim information, and uploading additional information as needed.

4. Insurance Objectives

Myth: Insurance is the same as savings

Insurance and savings are one and the same thing. Therefore, there is no need for insurance if we already have savings.

Fact: Insurance and Savings are different things

It is not true that insurance is the same as savings. These two financial products are very different even though they both aim to prepare for future prosperity .

Some differences between insurance and savings include:

• Insurance aims to provide protection against life risks such as death or health costs that may not be  covered by savings; savings aims to provide security from unexpected expenses and emergency funds ,
• Insurance is paid with a regular premium determined at the beginning of the insurance policy agreement; savings have flexible deposits depending on how much we set aside and there is no commitment to achieving these goals,
• Savings funds can be withdrawn at any time, whereas in certain types of insurance, the cash value can be withdrawn after a certain time according to the provisions of the insurance policy

These are some of the myths about insurance circulating in society, but of course they are not true. Don’t hesitate to dig up more information before we decide to buy an insurance product . Because after all, the right insurance is one that suits our needs and is able to protect ourselves from life risks in the future.