Understanding PAYDI Cash Value to Keep Policies Active
Having insurance is not enough if one only pays premiums. Customers also need to understand how their policy works, especially for unit-linked insurance products (PAYDI). This understanding is important because health conditions, protection needs, insurance costs, and economic situations can change over time.
This is increasingly relevant amid rising healthcare costs. Based on the Health Trends Report 2026 from Mercer Marsh Benefits, medical inflation in Indonesia is projected to reach 17.8%. Meanwhile, data from the Indonesian Life Insurance Association (AAJI) shows that health claim payments by the life insurance industry throughout 2025 reached around Rp26.8 trillion, an increase of 9.2% compared with the previous year.
In PAYDI, customers receive insurance protection benefits as well as potential investment returns. Because there is an investment component, customers need to understand the risk profile and the choice of investment instruments used, such as shares, mutual funds, deposits, and government securities (SBN).
From the portion of premiums allocated for investment, a Cash Value is formed. Cash Value comes from investment funds in the form of units owned by the customer after taking into account costs in accordance with policy provisions.
Meanwhile, part of the premium is used to pay various costs, including insurance costs, administration costs, investment fund management costs, top-up costs if any, and other costs stated in the policy. These costs can be charged monthly from the Cash Value.
Cash Value is not fixed. Its amount can change according to investment performance and activities carried out on the policy. Partial withdrawal of Cash Value, use of the premium holiday feature, changes in additional health insurance costs with age, and other factors such as medical inflation can affect the adequacy of Cash Value.
Under certain conditions, insurance costs can be adjusted in accordance with policy provisions. If premiums are not adjusted, the difference in costs can be charged from the available Cash Value.
If this condition continues for a long time, Cash Value can continue to decrease. When Cash Value is no longer sufficient to pay the costs in the policy and there are no adequate funds, insurance benefits, including additional insurance benefits or riders, can become inactive (lapsed) in accordance with policy provisions.
Therefore, monitoring Cash Value is one of the things customers need to do, especially PAYDI holders with additional health benefits. Periodic reviews can help customers know whether Cash Value is still sufficient to support their protection costs.
Chief Product Officer of Prudential Indonesia Astono Hermawan said understanding how a policy works is part of long-term financial planning.
“Amid economic dynamics and evolving protection needs, it is important for every customer to understand how their policy works, including how Cash Value can change according to market conditions, protection costs, and premium payments. By conducting periodic policy reviews and discussing with marketing staff, customers can make the right decisions so that protection remains in line with their needs and financial capabilities,” said Astono, quoted on Saturday (22/8).
According to him, Prudential Indonesia also provides digital services through PRUServices that customers can use to monitor policy conditions and obtain information about their protection benefits.
Customers can also take a number of steps to keep their policies active. First, pay premiums on schedule. Regular premium payments can help reduce the use of Cash Value to pay insurance costs and other costs in accordance with policy provisions. Autodebit facilities can be used to help ensure payments are made on time.
Second, review the policy at least once a year. The review can cover protection benefits, premium amounts, and Cash Value conditions and their suitability with current needs and financial capabilities.
Third, ensure contact information such as address, email, and telephone number is always updated. This is important so that notifications from the insurance company or marketing staff regarding policy conditions, Cash Value, or adjustment needs can be received on time.
Fourth, immediately consult with marketing staff or customer service if Cash Value begins to decrease and there is a risk that the policy or additional benefits become inactive.
In accordance with policy provisions and if requirements are met, customers can consider a number of available options, such as reinstatement, premium adjustment, or Cash Value top-up.