Arranging insurance as a security, investment plan<\/p>\n
By I. Christianto<\/p>\n
JAKARTA (JP): More life insurance companies, particularly
\nthose partly controlled by foreign enterprises, are operating in
\nIndonesia, proving that more people in the country are aware of
\nthe importance of having insurance.<\/p>\n
Such an upswing in people's awareness about the importance of
\ninsurance in their lives has, therefore, created a greater market
\nfor the insurance companies, in which then aggressively launch
\ntheir services to grab more market shares.<\/p>\n
The latest data from the Indonesian Insurance Council (DAI)
\nshows that the number of people covered by life insurance grew by
\n16 percent, to 22.76 million by the end of last year, compared to
\n19.58 million in 1998. Last year's figure for insured people
\nrepresents only 10.84 percent of the nation's population of 210
\nmillion.<\/p>\n
In the first quarter of this year, DAI reported there were
\n14,336,059 people insured; 79 percent of this number were under
\ngroup insurance. This shows that out of a population of 210
\nmillion, 6.8 percent were covered by life insurance.<\/p>\n
The insurance industry, however, believes the figure will
\nsurge by the end of this year, exceeding the 1999 rate. The low
\nrate also shows that the market in Indonesia is very promising.<\/p>\n
PT Asuransi AIA Indonesia vice president chief actuary and
\ndirector of marketing, Angger P Yuwono, said that the number of
\nnew policyholders would decrease, as it had been in recent years.<\/p>\n
\"But the quality is getting better,\" he said.<\/p>\n
He said the economic crisis that hit the country in 1997 had
\nbeen a kind of a test case for the financial sector, including
\nbanking, leasing and insurance businesses.<\/p>\n
The insurance sector survived as it works conservatively.
\nMeanwhile, more people put their trust in insurance instead of
\nsaving their money in banks, he said.<\/p>\n
He said some people had canceled their premiums held in
\ndollars, but on the other hand, others became new holders.<\/p>\n
\"Now, people have already become accustomed to the exchange
\nrate of the dollar against the rupiah. Furthermore, people have
\nbecome more aware of the importance of insurance,\" he said.<\/p>\n
Benefits<\/p>\n
Indonesians, just like people the world over, have been known
\nto be hesitant to take out a policy. Many consider the cost of
\nhealth insurance expensive. They do not understand the benefits.<\/p>\n
Many Indonesians want to see physical evidence of their
\npurchases, something absent in an insurance policy. Many also
\nstill do not really comprehend the concept of insurance.<\/p>\n
Vice President Megawati Soekarnoputri urged recently the need
\nfor a health insurance plan that gives all citizens access to
\nhealth care. The new program should be sustainable and accessible
\nfor all people who seek health care, she said.<\/p>\n
President Director of PT Zurich Life Insurance Indonesia,
\nRonald Cheyne, said while there was no official or formal survey,
\nit was a fact that after the financial turmoil began to
\nbeleaguer Indonesia, more people became life and health insurance
\npolicyholders.<\/p>\n
It is understandable that the crisis underlined people's
\nawareness about buying health and life or some other insurance
\nscheme. They also realize that insurance offers them benefits.<\/p>\n
Cheyne said that Indonesia was one of the promising markets in
\nAsia-Pacific.<\/p>\n
He said that based on data compiled by a research agent, 31
\npercent of holders who already had individual life insurance
\nwanted to own more, while 50 percent of the people without any
\ninsurance thought they needed to have some.<\/p>\n
He said that more Indonesians had participated in signing up
\nfor life insurance for family protection and education for the
\nchildren.<\/p>\n
Scheme<\/p>\n
Life insurance offers protection and security planning as well
\nas investment. Several insurance companies offer attractive
\nproducts to try to attract more clients.<\/p>\n
Family protection is usually one of the major reasons for
\npurchasing insurance. No one knows what will happen tomorrow,
\nwhat ruinous act may impact on personal finance. It could be a
\nkilling disease such as a heart attack or a stroke, which could
\ncost a family immensely.<\/p>\n
Accidents which can hamper a person's mobility and disrupt his
\nor her job and daily activities could also be a serious problem
\nin gaining income.<\/p>\n
Nobody wants a bad experience, but who can say? That is why
\ninsurers offer schemes to help people create investment and
\nprotection plans.<\/p>\n
For instance, AIA's Life Shield offers both protection and
\ninvestment in one plan.<\/p>\n
AIA is partly owned by American International Assurance Co.,
\nwhich is wholly controlled by American International Group of the
\nUnited States.<\/p>\n
Life Shield also offers other benefits such as hospitalization
\nand accident cover, including those caused by riots.<\/p>\n
Since the depreciation of the rupiah, costs in medicine and
\nhospitals have surged. Therefore, life and health insurance
\nbecomes a must to avoid the high expenses of health care.<\/p>\n
AIA, the first joint-venture insurer in Indonesia, also offers
\nLife Plus, a long-term life, flexible insurance scheme in rupiah
\nor dollars.<\/p>\n
Zurich, which is affiliated with Zurich Financial Services
\nGroup of Switzerland, offers several products, including Zurich
\nHospital Income, Zurich Investasi and Zurich Proteksi.<\/p>\n
Cheyne said that Zurich also provides Zurich Link, a Unit Link
\nproduct offering transparency. Zurich is the first insurer to
\nintroduce such a product in Indonesia.<\/p>\n
For those seeking protection for their families, Unit Link
\nproducts would be appropriate. Now, other insurers have also
\nstarted offering such a scheme.<\/p>\n
Zurich Link is a product for life protection allowing
\ncustomers to set their own investment choice and determine the
\nlevel of their life insurance protection. The product offers
\noptions for customers to invest in investment funds set in
\nseveral currencies, including rupiah and U.S. dollars.<\/p>\n
In selecting a good insurer in Indonesian, prospective
\npolicyholders can examine company profiles and look into the
\nbackgrounds of the owners, partners and other relevant factors.<\/p>\n
Check the investment policy; how the insurance company
\nreinvests the money; the claim payment schemes; the annual
\npremium rates; and, what the companies offer. Read the offered
\npolicies and review the plan descriptions. See also the benefits
\nof the products, such as annual bonus cash value guarantees or
\nother value-added services.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/arranging-insurance-as-a-security-investment-plan-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}