Know and trust your insurance company

By Christiani Tumelap

JAKARTA (JP): Have you ever wonder what would happen to your loved ones if death knocked on your door suddenly or misfortune slapped you in the face and you could no longer protect or provide a livelihood for them?

A 45-year-old businessman, Pranoto, said he was most certainly not ready to meet death any time soon, but would not be too worried about the future financial well-being of his wife and three children because he had insurance policies the family could rely on.

"I used to ignore it (insurance). It never crossed my mind to buy myself any until I learned how a family of a friend, who died earlier this year in an accident, must live a very, very tough life because my friend left them with no more than a few million rupiah in his savings account," he told The Jakarta Post.

Pranoto said he currently holds life insurance policies for him and his wife, a property insurance policy to cover his house and other policies that guarantee the cost of future education for his children.

President of the German-based insurance firm PT Allianz Utama Indonesia, Manfred Wittau, said insurance is very important as it provides a guarantee against almost anything that can go wrong in one's life.

He said a person who could cover all the basic needs in his life, or family if already married, and still have some money left to spare should spend part of it on insurance.

"There is a good reason for a small amount of money to save you life and belongings," he said.

Vice president director of another German-based insurance firm PT Zurich Insurance Indonesia, Kus Koharsaid, said insurance could act as a risk transfer as a person might have limited capabilities to absorb the risk by himself or herself.

He said the more risk-averse a person was the more the tendency he or she would have to be protected.

Korina, 30, said she acknowledged the need for insurance to protect herself against any unpredictable mishap in life. "I got older. And, though I'm still single, I have my parents, whose no longer work, and a young brother, who will go to college next year. What if I do not wake up in the morning? What do I have now to leave them?"

But Diana, a humanitarian worker, said that despite her deep thoughts, she has not bought any insurance policies yet. "Well, I just can't make up my mind on which product I should buy. Worse, I feel that I can't trust insurance companies because a few friends have had bad a experience in dealing with them."

Many insurance companies are currently operating in Indonesia, offering different products to cover risk on various events and subjects such as personal life, fire, vehicle, engineering, marine cargo and hull, aviation, energy risk, liability, personal accident, credit and surety bond.

Some of the products are even designed for people who want a whole lot of different concepts of insurance. Take PT Asuransi Takaful Umum as an example. "We follow the Syariah concept of Al- Takaful, which means a cooperation in goodness, and Al- Mudharabah, which means profit sharing," said company assistant operation director Adi MS.

The Indonesian Board of Insurance Companies said life- insurance products were sold more than other types of products. The number of life-insurance policyholders in Indonesia reached 18.60 million as of last year and is expected to grow by 30 percent by the end of this year.

President of London-based insurance firm CGU Insurance, Mark Smith, said the pattern of awareness and demand on insurance policies have been significantly increased since mid-1998, when people started to realize the importance of having insurances after they suffered life, financial or material losses during the riots.

Many people here do not bothered to get insurances because they feel no obligations to do so, said Wittau, while comparing people in western countries who were encouraged by the government to get insurance.

He said it was also not a surprise when would-be customers said they were having difficulties in finding the right products and insurance companies to rely on. He said there should be definite guidelines or ratings on the quality of the products and companies that could be used by people in determining their choices.

The following are some tips from insurance executives for would-be insurance policyholders:

* You must first identify your risk and define your insurance needs.

* Check out the company that you are interested in buying an insurance policy from, make sure it has a proven financial background and quality claim service.

* Tell the insurance company clearly what you want to cover, what kind of protection you want and ask what the firm can provide.

* If an insurance agent pushes you hard to make you believe in his or her company's product, and tells you to take whatever the company has to offer without bothering to listen to your wishes, ask them to leave.

* Get only the kind of product and service that you really need and can afford by taking into account factors like your age, earning capacity, marital status, lifestyle and number of people who are financially dependent on you.

* Do carefully and thoroughly read the terms and conditions of the insurance policy printed on the back of the agreement.

* Know your rights and obligations.

* Do ask a lot of questions. There are no silly questions.

* If the insurance company puts you in a difficult situation when you are trying to get your claim, file your complaints not only with the company's board of directors, but also with the Indonesian Board of Insurance Companies and the Ministry of Finance's insurance division.

Remember, you are the one paying a lot of money for insurance, and the insurance policy should be for your benefit not the company you are insuring from.