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Health insurance: Definition, Types, Functions


Health insurance is a financial product that is well known to Indonesian people. The Central Bureau of Statistics (BPS) revealed that in 2018 alone, 208 million out of 262 million Indonesians, or 79.4%, had health insurance.

This means that 794 out of every 1,000 inhabitants already have health insurance. The figure represents an increase compared to 2017, when he was known to have health protection for only 716 people per 1,000 inhabitants.

The presence of BPJS Kesehatan as of 2014 is probably the main reason for the expansion of health insurance coverage in Indonesia. There is no denying that the country's institutions have made health protection more accessible to its citizens.

However, the existence of private health insurance in addition to BPJS should also be considered. This is because BPJS imposes restrictions on, for example, diseases covered and medical services available. In this way, private medical insurance can complement his BPJS facilities and better protect you.

What is health insurance?

According to Investopedia, health insurance is a type of insurance that covers medical, surgical, drug and similar expenses for the insured or policyholder. This is an insurance policy that provides reimbursement of medical expenses due to sickness or injury and direct payment of medical expenses.

For example, let's say you have a fever and go to the hospital. After a medical check-up, I found out that I needed to check the lab and buy some medicine for the healing process. If you have health insurance, part or all of the cost of this treatment will be reimbursed. However, the costs and benefits of health insurance vary depending on the benefits described in the insurance policy. Therefore, always read the policy terms and conditions carefully before deciding to enroll.

Which type of health insurance should you choose?

1. Medical insurance according to the content of treatment

This health insurance covers hospitalization costs if you need hospital treatment.

This insurance covers the cost of non-hospital treatment, such as medical diagnoses, lab tests, and the purchase of medicines. 

2. Health insurance determined by the organizer

This health insurance is issued and administered by governments such as BPJS Kesehatan.

Health insurance operated by a private organization.

3. Medical insurance for each insured person

Health insurance that benefits only one person. collective or group
Health insurance that provides benefits to groups of individuals, such as families and businesses.

How does health insurance work?

Health insurance protects your household against health risks that may arise during the period of insurance. In other words, if you do get sick, you are passing the financial risk on to your insurance company instead of covering it yourself.

A simple explanation of how it works is as follows.

You subscribe to health insurance with a monthly premium of IDR 100,000. Therefore, if you become ill and have medical expenses, your health insurance will cover those costs. Exchanges can be direct (cashless) or through a redemption system. The amount of fees refunded depends on the policy contract you choose. 

Health insurance terms you should know

Many insurance terms are often confusing to the lay person. This is important, but know it in order to understand exactly the benefits of the insurance you choose.

Here are some health insurance terms you need to understand to ensure optimal coverage.

You will be paid periodically by your insurance company.

Bank bancassurance
Insurance products offered and sold through banks. This service is for customers using our bank. Cutoff 

Expenses that the policyholder must bear to cover the shortfall that the insurance company pays to the hospital.

Acquisition cost
additional costs borne by the customer to the insurer at the time the policy is issued

Cash value (cash value)
The total amount paid by an insurance company to a policyholder.

Objection period
The period during which an insurance company can cancel an insurance policy.

Bonus leave
This is an insurance function that can be used when you do not want to pay insurance premiums for a while.

Payment terms
A grace period given to a policyholder after the premium payment deadline. Expectations:
A claim by a policyholder to obtain rights according to a catalog of services provided by an insurance company.

The terms of the insurance contract that the policyholder and the insurer must comply with

If the premium is not paid beyond the grace period, the policy may be canceled or the policy may expire.

An insurance contract document between an insurance company (the insured) and the insured (the customer). It contains general and/or additional terms and conditions relating to insurance products.

The person who enters into the contract with the insurance company is the same as the policyholder and is the payer of the premium, and has the right to cancel the insurance at the end of the insurance contract.

Damage is not covered by insurance. Health insurance usually makes exceptions for types of illness not covered by health insurance.

The nominal payment agreed upon by the policyholder and the insurer to receive insurance.

Various bad ways that can happen to someone.

Secondary benefits
Additional services available in addition to the main service.

Insurance amount
The amount an insurance company must pay when a claim is made against a policyholder for a risk covered by an insurance program. Waiting period:

Waiting time for insurance to take effect or waiting time for the insured to be able to make a claim. 

List of the best insurance in the world:

1. Berkshire Hathaway
2. China Life Insurance
3. Ping An Insurance
4. AIA Group
5. Allianz
6. American International Group (AIG)
7. Prudential
8. AXA
10. MetLife

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