What comes to your mind when you hear about insurance? Maybe the first time you thought of insurance is protection against risk. It is true, in general the primary function of insurance is to transfer risk (risk transfer) from the insured party that is you as a customer / insurance policy holder to the guarantor (insurance company).
Insurance is a risk transfer mechanism, where a person or company can move some of its life uncertainties through premium payments. Insurance is an alternative to minimize the risk of unexpected events.
Insurance is an agreement between an insurance service provider as an underwriter and the community holding the policy as an insured. Based on the agreement, the insured party is required to pay a premium in order to provide compensation for the risk of loss, damage, death and loss of expected benefits, which may occur from unexpected events. iSelect Insurance will cover all risks with the best insurance this year, visit the website immediately at https://www.iselect.com.au.
With this agreement, when the policyholder or insurance participant or the insured suffers a disaster and gets a loss or damage listed in the contract, the insured has the right to submit an insurance claim. The recipient of the insurance is not only the insured whose name is listed as the policyholder but also other people who are appointed directly by the insured. Now, besides being a protection for unexpected risks, it turns out that insurance also has other benefits that you need to know about.
This is the secondary function of insurance you need to know:
1. Protection against loss
Not only for yourself, for those of you who are just starting a business also need to consider having insurance. Because while running a business, of course we cannot be sure of what will happen in the future. Many unexpected possibilities can affect business activities, for example fires, natural disasters, floods that damage assets and many more that have the potential to cause financial loss to the company or even transportation.
Therefore, by insuring business assets, you can eliminate greater losses due to unforeseen accidents, rather than losses that must be borne by you as a business owner. That way, you can continue to focus on running the business without having to think about the company’s losses because it has been borne by the insurance company.
2. Means of savings and investment
In addition to diverting possible risks in the future, insurance can also function as a means of saving and investing. In life insurance for example, for every premium payment that you pay regularly every month will accumulate into a deposit fund with a fairly promising nominal. Whether there is a risk or not, the premium funds you pay can later be returned or claimed according to the rules or agreements agreed upon.
While the investment function, you can see for example the type of unit link insurance. This type of insurance not only covers life protection from accidents, total disability, permanent disability and illness, but also offers investment benefits. Where the accumulated customer cash value will be invested in the form of units in an investment instrument.
Thus, customers can invest while still getting insurance protection opportunities.
3. Stimulate economic growth
More broadly, insurance also serves to stimulate a country’s economic growth. Because with the insurance, interested parties can focus themselves on development steps and not worry about risks or adverse events.
With so many premiums accommodated by insurance companies will increase the flow of money. Some of these funds will also be reinvested in low-risk investment instruments so that they can add to other profits or strengthen the financial structure of the insurance company. Insurance activity has the potential to increase economic growth because it can mobilize domestic savings, so that on the one hand it excites other business sectors.
With the existence of primary and secondary benefits, it is not wrong if then insurance can give you a sense of security to deal with various risks that may be present in the future. With that sense of security, you can concentrate more on your activities and develop yourself to be more productive.
So that you understand more, then you also need to know the types of insurance in Indonesia. Who knows with knowledge of the benefits of both primary and secondary, including the type of insurance offered, you will be more motivated to insure.