Benefits or advantages of taking insurance – What are the Advantages and Disadvantages of Insurance? Unfortunately, for some people, insurance is seen as something that sucks. Especially with the many stories that say it is difficult to claim insurance money.
Insurance is an agreement between two parties, namely the insurance company and the policyholder, which is the basis for receiving premiums by the insurance company in return for Providing compensation to the insured or policyholder due to loss, damage, costs incurred, lost profits, or legal liability to third parties that may be suffered by the insured or the policyholder due to the occurrence of an uncertain event. For example, providing payments guaranteed to’s death insured or charges insured the life insured with benefits whose amount has been determined or based on the results of fund management.
That’s what makes people lazy with the name insurance. But, insurance is useful for urgent situations that may come in the future.
However, many don’t understand. As a result, it’s already felt with insurance, for example, the case of an insurance claim that went viral on social media recently.
See the explanation below for those who want to find out about insurance. As additional information, until now, many insurance companies have offered their products to guarantee people’s lives. From health insurance, safety, losses in business, education, and vehicle guarantees can be obtained by the public. Not only that, insurance can even be used as a place to invest with profitable results. Besides being able to be protected, insurance can also be an alternative in guaranteeing the future.
Benefits of Joining the Insurance Program
Previously, we have discussed a little about the benefits of insurance. Although this insurance program targets individuals, in its development, the benefits of insurance can reach the wider community. For example, insurance profits as invisible earnings. Its invisible earnings allow insurance to increase foreign exchange to the state.
This foreign exchange can be generated from invisible export activities by insurance companies managing funds from their customers. Export activities can also be carried out by transferring the risks experienced by the insured to outside parties, which can increase foreign exchange for the country. This foreign exchange will later be used as state income to build the growth and interests of the community.
The insurance benefits mentioned above can be achieved because the program has several positive goals. But, of course, like everything else, insurance has advantages and disadvantages. Anything?
Advantages of taking insurance
– Insurance for Future Savings
We don’t know what will happen in the future. So that’s why by taking insurance, it is like you have prepared yourself for a bad situation later.
Insurance can be used as a reserve fund in the future for health matters or risky things.
– Help Manage Finance
Because there is an unusual amount that needs to be paid to insurance can keep you from spending money on consumer and useless goods.
So insurance helps you control your finances more tightly and think about what to prioritize, not what you want.
Insurance guarantees protection against risks that may occur to its members with a cost equalization system. This means that insurance will cover losses from hazards arising from premium fees paid by a certain amount by its customers.
Few insurers are now working with the bank or vice versa. As a result, access to borrowing funds from banks is now easier. This will make the bank increasingly tighten the terms of the loan or credit submitted by its creditors. With insurance, the bank as the borrower will get guaranteed protection for the collateral provided to the borrower.
It has often been explained that insurance can also be used as a place to invest. Investment in insurance can also be interpreted as savings to cover the loss of earning power. When a business entity or individual is no longer working productively, this insurance can be used when business activities are no longer carried out.
From the explanation above, it can be concluded that insurance has beneficial functions and benefits for its participants. In addition, insurance can also be a means to transfer risks that may occur to the insured person or asset. That way, insurance benefits can at least minimize losses from the participants’ danger sets.
Funds can be forfeited if the premium is not paid
Every insurance has a sunk fund system. So if you stop paying premiums every month, the funds you paid previously will be forfeited, and you can’t make a claim.
Part of Premium Funds Become Company Profit
Regarding the previous point, payments that stop in the middle of the road make the payments you made forfeit.
It makes you unable to make a claim. As a result, the premium funds you have paid now belong to the insurance company.
Until now, many types of insurance can be chosen and adapted to personal needs. Such as disaster insurance, health insurance, life insurance, education insurance, property insurance, vehicle insurance, and so on. By following this insurance program, you have prepared for the future and minimized losses in the future.
Many experts say that insurance activities are the same as saving activities. This saving activity is intended to prepare for the resolution of risks. In addition, the existence of a unit-linked insurance product allows participants of this program to participate in capital market investment. As is well known, most investments in unit link products involve mutual funds as a place to invest.
1. Primary Function The primary function is the risk transfer mechanism. This function is a means or mechanism for transferring risk from the insured to the insurer for the possibility of loss or damage experienced by the insured by paying a premium. The insurance premium paid by the insured must be reasonable and balanced with the level of risk accepted by the insurer (equitable compensation). Thus, the insurance company has sufficient funds to pay its obligations to customers who experience losses.
2. Secondary Function: Insurance’s secondary function is to stimulate economic and business growth, prevent losses, control losses, have social benefits, and as a savings or investment.
Thus a discussion of the benefits of insurance can be conveyed. Don’t hesitate to register as a policyholder at your trusted insurance company. Adverse risks can occur at any time unexpectedly. With insurance, you will be calm in dealing with these things. It may be useful!
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