Tax Incentives Make Insurance Products More Attractive, Here's Why!

Jakarta — The Chairman of the Board of Trustees of the Indonesian Life Insurance Association (AAJI), Albertus Wiroyo, believes that insurance products linked to investment (PAYDI) still possess substantial potential. He noted this applies not only in Indonesia, but also in several other countries.

However, for Indonesia specifically, the association continues to improve and push for PAYDI to become more competitive and straightforward, enabling more people to utilise such products.

“Therefore, we expect support, particularly from the regulator and the fiscal sector, namely personal income tax relief to make life insurance more attractive, including PAYDI. If there is tax relief, the returns for policyholders will be more compelling,” he elaborated at the Insurance Forum with the theme “Optimisation of Insurance Protection and New Direction for Unit Link Development in Indonesia” on Thursday, 26 February 2026.

Albertus acknowledged that insurance claims have been exceptionally high in recent years. Furthermore, many insurance companies have incurred losses, forcing them to raise premiums. This has resulted in numerous complaints.

“Why the increase? Inflation is a factor, but there is overcharging and over-treatment, which fortunately has been regulated by POJK and will continue to be improved,” he stressed.

Moreover, he did not deny that unit-linked products are more complex due to their embedded risks, although they are highly flexible. Unfortunately, current customer trends favour certainty.

“Policyholders need certainty, but we need a new balance from our members. Therefore, we are still conducting studies that will be discussed with the OJK regarding matters that need improvement,” he concluded.