In the financial pyramid, insurance occupies a basic position, namely protecting wealth to maintain future prosperity. Placing insurance as a top priority certainly cannot be separated from the insurance benefits obtained by policy holders.
In this discussion, we focus on discussing the objectives, benefits and functions of insurance. It would be better if you found out more about insurance by reading articles.
What is Insurance?
Insurance is basically an agreement between the insurance party as the guarantor and the customer as the insured. In insurance, the insurer provides coverage or replacement if something happens to the insured or his belongings in accordance with the agreed agreement.
In short, insurance companies provide reimbursement to customers if something undesirable happens. Meanwhile, the customer as the insured must also carry out his obligations, namely paying insurance premium contributions according to the agreement.
Purpose of Having Insurance
It's not without reason that people have insurance. The reason is, insurance ownership aims for the three things below.
1. Protecting Life and Asset Protection
When a risk occurs, such as going to hospital, it is not uncommon for lives and assets to become victims. Insurance can protect the life and assets owned by customers when this happens. Customers do not need to sacrifice assets because the insurance company has covered the costs of this incident.
2. Provides Long-Term Financial Protection and Security
Many people think that the impact of insurance cannot be felt at this time. In fact, insurance aims to provide financial protection in the long term. Customers don't need to worry because their finances will remain safe under any circumstances.
3. Reduce the Impact of Losses Due to Unexpected Events
Unexpected events always result in risks, especially from a financial perspective. Insurance can minimize these sudden impacts so that they do not become more serious. For example, a customer who dies even though he is the head of the family. The customer's heirs will receive insurance money as their life support.
Benefits of Having Insurance
Insurance also brings protection benefits from various aspects of life, not only financial. Aspects such as health, life, even education and retirement also benefit from insurance. See the explanation below.
1. Financial Protection
Natural disasters, accidents and other unexpected events certainly require a large amount of funds to recover from these events. Insurance provides benefits in the form of financial protection so that customers are still able to meet their needs.
2. Health Protection
A credible insurance company has a network of qualified health service facilities. Having insurance means customers have the opportunity to gain access to quality medical care for both inpatient and outpatient care.
3. Life Protection
Insurance is also useful when a customer who is a breadwinner dies. The heirs will get access in the form of compensation or death benefits from the insurance premiums paid by the customer.
4. Education Protection
The high and ever-increasing cost of education is certainly a worry for parents. The solution is that they can open insurance to provide an education fund protection plan for their children.
5. Retirement Preparation
There is also insurance that has a coverage period until the customer decides to no longer work for reasons of retirement. Insurance provides benefits in the form of preparing retirement funds so that your needs in old age are still met.
Insurance Function
The purpose and benefits of insurance do have an impact on the future. However, insurance also has a function that can be felt during the coverage period. What is the function of this insurance?
1. Manage Risk
Risk management is needed in various aspects of life. Insurance functions to identify, measure and manage risks that may occur. Customers can avoid financial risks due to experiencing unwanted events because it is covered by insurance.
2. Provides Financial Security
Insurance also functions to provide financial security for customers. Customers don't need to feel anxious when difficult times occur because they already have insurance that is ready to cover them. Customers only focus on their obligations, namely paying premiums within the agreed period and amount.
3. Provides Peace of Mind
Having insurance also functions to improve psychological well-being. Customers can feel peace of mind and don't need to worry when they have insurance. A relaxed mind will certainly enable customers to concentrate on living their daily lives in peace.
