Insurance Is Coverage, How It Works, Types And Benefits


Jakarta Insurance is a pretty familiar word in our lives. Almost everything is insured. You can also choose to use insurance when sending items via courier services. So what exactly is insurance?

In simple terms, it can be understood that insurance coverage is only covered when the risk actually occurs. For example, if you ship a package of goods, you run the risk that the goods will arrive at the recipient lost, undelivered or damaged. In case of risk, insurance covers the loss.

The amount of coverage depends on the contract between the insurance company and the policyholder. In this description, insurance can be understood as a legal contract between an insurer (insurance company) and the insured, in which the insured receives financial protection from the insurer against losses under certain circumstances.

So what is the mechanism and how does insurance work? What are the benefits of purchasing insurance? Before answering all these questions, here’s what on Thursday (22/12/2022) summarizes from various sources on what insurance means:

According to the Big Indonesian Dictionary (KBBI), insurance is a guarantee or contract between two parties, where one party is obliged to contribute and the other party is obliged to provide full guarantee to the contributor in case something goes wrong with the contributor or its property. contract made.

Insurance is a legal contract between an insurance company (insurance company) and the insured person, in which the insured person receives financial protection from the insurance company against losses incurred under certain circumstances. As is generally the case with all contracts, both parties are bound by an agreement known as a policy.

Under the insurance policy, the insured must pay a certain amount of premium to the insurance company on a regular basis. In the event of an unfortunate event such as death of the insured or damage to the insured or his property, the insurer pays the insured a predetermined amount.

From this description, it can be seen that insurance is a contract represented by an insurance policy in which the policy holder receives monetary protection or compensation from the insurance company.

claim insurance

Insurance is a contract between the insurer and the insured. Both parties involved in the Agreement are bound by an Agreement known as the Policy. An insurance policy lists all the terms and conditions under which the insurance company is responsible for paying the insured amount to the insured.

If you purchase insurance from an insurance company, you must make periodic payments for a set period of time according to the insurance terms and conditions. These periodic payments are called premiums.

Insurance companies charge premiums to all customers. They collect money for damages caused by an insured event.

From this explanation, it can be seen that insurance is a contract for the purpose of bearing risk. For insurance to work properly, three important elements must be met: premium, policy, and claim.


The insurance premium is a value and is usually expressed as a monthly fee. Premiums are determined by the insurer based on the risk profile of you or your business, which may include creditworthiness.

For example, if you own multiple expensive cars and have a history of reckless driving, you’re more likely to pay more for car insurance than someone who owns a midsize sedan and has a good driving record.


A policy is a legal document governing an insurance contract. The value of the benefit, the amount of the premium, starting with the risks covered and ending with the exclusions (risks not covered by insurance). Insurance policies are legally binding. If a party violates any of the policy rules, the other party has the right to suspend cooperation or sue the party.


A cap is the maximum amount an insurance company will pay under a policy for an insured event. Generally, the higher the limit, the higher the premium you will have to pay. In general life insurance, the maximum amount the insurer pays is called par value and is the amount paid to the heirs after the death of the insured person.

You have to charge it to get it. An insurance claim is a formal submission to an insurance company when a customer experiences a risk covered by an insurance policy. When a claim is made in accordance with the provisions specified in the insurance policy.


Insurance is a contract between two parties in which one party, as the insured, guarantees and bears the loss caused by the risk of the other party. Meanwhile, the insured must pay periodic contributions called insurance premiums. You can purchase several types of insurance, including:

1. Life Insurance

Life insurance is purchased to ensure that loved ones are financially secure while away. If you are the only earner, you want your family members to have the same standard of living if you die. With this insurance, upon your death, your heirs will receive a fixed amount according to the policy.

2. Health insurance

Health insurance is a type of insurance that covers the cost of treatment in case one day you get sick. The costs covered by this insurance are also based on the policy.

3. Damage insurance

Covers ongoing losses arising from certain non-life-related financial events. Property and casualty insurance can be car insurance, home insurance, etc.

The benefits you get while enrolling in insurance include:

20160226-Asuransi Kesehatan-iStockphoto

1. Financial Security for Families

Insurance is a contract that can provide protection against life’s uncertainties and protect you from losses caused by various unpredictable events in life.

2. Stability of financial position

Certain events, such as medical emergencies, can have a significant impact on cash flow management. Insurance ensures that you do not have to pay out-of-pocket for such situations.

3. Investment

Different types of insurance can provide investment opportunities and help you achieve important financial goals.

4. Wealth distribution

Few investment plans offer the type of protection that life insurance retirement plans provide. If you retire at 60, you can live to be 100. Only a life insurance annuity can guarantee a stable income for that period.

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