General insurance is a type of insurance – did you know that insurance in Indonesia is divided into 2 types, namely life insurance and general insurance.
Both types of insurance transfer the risk or provide a guarantee. However, there are huge differences between the two.
Life insurance is a type of insurance in which the benefits of insurance will be realized by the heirs or the family of the subscriber. So what is general insurance? Here is the explanation.
General insurance is one type of insurance that provides protection in the form of reimbursement to customers or policyholders for losses arising from uncertain risks. The benefits of this protection can be felt by policyholders directly.
Well, from this understanding, you can see the difference between life insurance and general insurance. In general insurance, claims from insurance funds can be felt by the policyholder as a form of financial protection from the insurer.
General Insurance Function
The function of general insurance is no different from the main function of insurance, namely:
Risk Transfer Mechanism
General insurance serves to transfer uncertain risks from the insured to the insurer. For example, health insurance, so that when a customer has a health problem, they get the benefit of medical expenses.
General insurance functions as a fundraiser. General insurance also provides premium rates to its customers. The premium will be collected and redistributed in the form of claim funds or sum assured.
The next function is equitable premium or the balance between premiums and protection benefits. The determination of the premium must be balanced with the benefits that will be received by the customer. So the amount of premium depends on the risk the customer has.
The fourth function is to minimize losses. General insurance serves to minimize negative impacts or losses caused by risks such as health problems, damage, and so on.
Stimulating Economic Growth
Indirectly, insurance can stimulate the country’s economic growth.
Types of General Insurance
The first type of general insurance is health insurance. Health insurance is protection or protection provided to customers by insurance companies against health risks such as critical illness, dental health, cancer, and so on.
The benefits or protection that you can feel are in the form of hospitalization costs, consultation with specialist doctors, surgery, dental care, and so on according to the selected product.
Next is vehicle insurance. Vehicle insurance is a type of general insurance that provides protection for two-wheeled and four-wheeled vehicles.
The benefits provided by insurance companies are in the form of guarantees for risks against damage, fire, natural disasters, theft, and so on. Vehicle insurance is further divided into TLO (Total Loss Only) vehicle insurance and all risk (comprehensive) vehicle insurance.
Home insurance is one type of general insurance that provides guarantees or protection for homes. Not only vehicles, houses can be insured to minimize the risks that may occur.
Home insurance is also often referred to as property insurance, the benefits that customers can feel in the form of guarantees against the risk of fire, natural disasters, and even theft.
This type of insurance provides protection for the house and property in it. Property insurance is further divided into all risk property insurance and PSAKI property insurance.
That’s about general insurance even though it is understood. Hopefully it’s useful.