Best Life Insurance in Indonesia

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Beranda Best Life Insurance in Indonesia

8 Best Life Insurance in Indonesia

Life insurance is a contract that guarantees for the insurance company to pay a sum of money (death benefit) to the insured’s family upon their death. Life insurance plays a very important role to avoid prolonged financial losses for the family left behind. For that reason, it is a must-have especially for the breadwinner of the family.

There are hundreds of life insurance plans available in Indonesia. Lifepal has concluded 8 best life insurance plans that you can choose according to your needs and budget.

1. Simas Jiwa SIJI Guard 4

2. Allianz SmartLink New Flexi Account

3. Chubb Life Extra Cash Back Protection

4. Sequis Life Financial Smart Life

5. Manulife Essential Assurance

6. Generali Indonesia iPLAN

7. AIA Indonesia AIA Powerpro Life

8. Prudential PRUWarisan

Life Insurance in Indonesia

Indonesian government provides a mandatory life insurance program for employee called The Indonesia National Social Security Insurance or BPJS Ketenagakerjaan. This program is eligible for anyone residing in Indonesia, both owning or working at a company. However, the benefit of BPJS Ketenagakerjaan is limited. So, if you wish to have the VIP or better death benefits, we highly recommend to join independent life insurance at your own expense.

To join life insurance, the insurance companies usually will ask about your age, health, tobacco use, family health history, and any dangerous occupations or hobbies. Some insurance companies will also require you to do a medical exam to obtain more accurate data. That will determine the sum premiums that need to be paid annually.

Types of Life Insurance Plan in Indonesia

There are four types of life insurance available in Indonesia. The most popular ones are term life and whole life insurance. Understand how each type work to help you choose the right plan for your needs.

Whole Life Insurance Plans

Whole life insurance is a type of permanent life insurance that accumulates cash value, which allows the policyholder to use the cash value for many purposes, such as the source of loans or inheritance.

This type offers coverage as long as the insured lives. One of the characteristics of a whole life insurance plan is the age coverage can be up to 99 or 100 years old.

The sum or amount of money is payable after the demise of the insured. These whole life insurance types are more suited for people who want to do money saving and also need death risk protection.

Term Life Insurance Plans

Different from a whole life insurance policy, a term life insurance policy lasts for a certain number of years, then the contract ends. You can choose the term when you buy the policy.

Common term life insurance options for the periods are 10 or 20 years. Term life insurance plan usually has cheaper premiums, so it’s affordable and also offers long-term financial strength.

Unit Link Insurance Plans

This is one of the most unique types of life insurance because it mixes investment (market-linked returns) and protection from insurance. The premium you pay for this life insurance is partially used as a risk or insurance cover and partially invested in different funds.

Over time, you can get the profits from the investment. But the number of profits are not guaranteed.

Endowment Insurance Plans

This is one of the traditional types of life insurance which blends insurance cover and savings, best suited for you who needs a long-term financial plan like retirement or even weddings.

With endowment insurance plans, if the insured live longer than the policy period, the insurance company provides maturity benefits to the policyholder. Some companies also give additional periodic bonuses that are either paid together on maturity or to the beneficiary in case of the policyholder’s untimely death.

Child Education Insurance Plans

Child education life insurance helps in funding the education, typically starting from kindergarten until they graduate from college. The education fee is getting higher each year, so having this insurance might be helpful for newlywed couples as preparation.

Some companies provide payment differently, following the child’s age and education, they can be in one lump sum pay-out or annually. In case the insured parent suddenly died during the policy term, future premiums will be waived off and the policy benefits will continue without disruption.

Retirement Insurance Plans

Planning for retirement is never too late, and having a retirement insurance plan can help you to build a financial source after your retirement. With this type of insurance, you will be financially independent and live without any worry even after being unable to get to work again.

Retirement insurance offers annual pay-out or accumulation annuities (one-time lump sum pay-out) on the completion of certain retirement age. In Indonesia, based on government regulation, the retirement age for civil servants is until 65 years old, and for private workers is until 55-60 years old.

Life Insurance Riders

Riders are add-on benefits offered by the insurer to help enhance the base insurance or coverage. Choosing the right life insurance riders is as crucial as buying the base insurance plan.

Here are some of the rider options available for a life insurance policy:

1. Critical Illness Rider

Critical illness rider covers major terminal or critical illness, such as cancer, kidney failure, stroke, heart attack, etc. The coverage may differ from one insurer to another insurer, it’s important to check the list of the illness covered by the company.

Though some critical illnesses may not cause immediate death, the treatment could cost a lot. Using this rider, you can use the sum benefit to pay for the treatment expenses. This is different from health insurance.

2. Accidental Death Benefit Rider

Accidental death benefit rider provides additional life insurance coverage if the cause of the insured’s death is accidental. Some life insurance policies already cover this benefit, and some do not, so it’s important to check the coverage of your life insurance first before purchasing this rider.

3. Accident Total and Permanent Disability Rider

Not only death, but disability also play a part as a cause that makes the insured unable to work for several months or longer, or even permanent due to a serious illness or injury. This rider offers monthly payments to cover the lost finances.

4. Waiver of Premium Rider

This rider aims to relieve the policyholder from making premium payments if the insured becomes disabled and unable to work or meets an untimely death.

Benefits of Life Insurance Plans

Life insurance can give your family or loved ones financial stability in case of a tragedy. Here are some common life insurance benefits:

Death benefits

The death benefit is a payout given to the beneficiary when the insured passes away. The lump-sum benefit varies, depending on the type of policy you choose.

In the beginning, the insured will choose the desired benefit amount based on the beneficiary’s estimated future needs or the insurable interest. Then, the life insurance company will determine whether the proposed insured qualifies for the coverage based on the company’s life insurance underwriting requirements.

Cash value

Cash value benefits are often found in whole life insurance. These life insurance benefits serve two purposes, which are as a savings account that the policyholder can use during the life of the insured, and the cash accumulates on a tax-deferred basis.

Some insurance companies allow you to withdraw cash value, but sometimes they also have restrictions depending on how the money is to be used or a certain period. The cash value can also be used to pay premiums, policy loans, educational purposes, or purchase additional insured.

Retirement savings

Whole life insurance usually offers retirement savings. The cash value in addition to the death benefit can also be used as extra money when the insured has reached certain retirement age. Life insurance retirement plan is also a popular type of life insurance in Indonesia.

Why Is Life Insurance Important?

Having life insurance is essential to your financial strategy, especially if you’re the breadwinner of the family. That’s because life insurance can help ensure that your loved ones will still have a secure financial future after you pass away.

Please note that life insurance is also very important for expats living in Indonesia. Although most life insurance companies will cover the risk of death abroad, the claim process may take a lot of time. For that reason, it is recommended for expats to have the extra protection of life insurance that is available in Indonesia.

How Much Life Insurance Coverage Do You Need?

The key to finding the best life insurance plan is to calculate how much coverage you need. You can use Lifepal’s calculator to calculate the death benefits that you need, so you never overpay for coverage.

How to Claim Life Insurance in Indonesia?

Life insurance claims can only be settled by sending documents to the insurer when there are cases of death or disability, according to the policy you have. In case of death, only the named beneficiary can file a claim to the insurance company and get the benefit.

Here are the explanations for each case:

How to Claim Life Insurance in Case of Death?

Procedure:

Beneficiary reports/contacts to the insurer about the death of the insured, not more than 7 days after the event date
Beneficiary sent the needed claim documents to the insurer
The insurance company will do a verification the claim documents
If all requirements have been met, the insurer will pay the death benefit to the beneficiary’s bank account, typically within 14 days.

Documents:

Claim form
Policy book/card
Proof of identity from the insured, policyholder, and beneficiary
Death certificate
Doctor’s death statement of the insured
Copy of the insured’s medical record
In the event of an accident, report file from police

How to Claim Life Insurance in Case of Disability?

Procedure:

Collect all the claim requirements document
Sent the documents to the insurer
The insurance company will do a verification the claim documents
If all requirements have been met, the insurer will pay the death benefit to the beneficiary’s bank account, typically within 14 days.

Documents:

Claim form
Policy book/card
Copy of identity card
Copy of lab exam or radiology
In the event of an accident, report file from police

Reasons Why Your Claim Could be Rejected

There are some cases when the claim request is rejected by the insurance company. Some of the most common reasons are:

You're not listed as the beneficiary

In case of untimely death, only people listed as named beneficiaries can file a claim and get the death benefit. If people other than the named beneficiary file a claim for the insured, it will be directly rejected.

Claim included in the exclusions

Some conditions are not covered by the life insurance plan, such as the death of suicide or a criminal act. Exclusions vary to each insurance company, so it’s important to read your policy carefully to avoid having your claim rejected.

Inactive insurance policy

If you don’t pay the premium, your policy will lapse and get suspended. In this period, you are unable to file a claim.

Exceeding the claim time limit

Some life insurance policies provide a certain period to make the claim. If you don’t apply within the time specified, your claim might be rejected.

Inadequate claim documents

Inadequate or incomplete claim documents sent will be rejected by the insurer. You need to complete all the required documents to confirm the validity of the claim.

In waiting period

After registering for insurance, you have to wait for some time until your insurance policy is all set and activated. During this waiting period, you cannot file claims.

Tips for Choosing the Best Life Insurance in Indonesia

There are many life insurance policies available in Indonesia. Choosing one that can meet your needs and budget can be quite challenging. While there are many factors that you need to take into account when buying life insurance, here are some of the most important tips to consider:

1. Find the best types according to your needs

There are many types of life insurance available in Indonesia. You need to find one best suited for your needs and budget. The amount of life insurance you need depends on a few factors, such as:

Your income, choose the coverage amount that’s 10-15 times your income is a good start
Outstanding debts and financial obligations
How long you’ll have financial dependents

2. Choose traditional life insurance for cheaper plans

Traditional life insurance doesn’t offer investment features, so only offers pure protection. Hence the premium is cheaper than the policy with investment components.

3. Check company reputation and reviews

Many insurance companies provide different life insurance plans. Choose a renowned life insurance company and have earned goodwill in the market, good reviews, and most importantly they’re able to fulfill your insurance requirements.

It’s also best for you to choose an insurance plan that offers international coverage, like Allianz.

4. Compare with another company

You should compare life insurance quotes from several companies because prices can be varied. You can also do the comparison on Lifepal by clicking here!

Why Buy Life Insurance Plan From Lifepal?

Lifepal provides the best life insurance with high death benefits and longer coverage, also offers a variety of life insurance types suited for your needs. Lifepal partnered up with the top and reputable insurance companies, such as Sinar Mas, Equity Life, Cigna, Sequis Life, JAGADIRI, Prudential, and Allianz.

Some of our clients include big names, such as Lazada, Lamudi, Deliveree, Happyfresh, J&T, and many more.

Learn more about Lifepal life insurance plans now!

Lifepal is operating under a registered Broker License. The License is under PT Anugrah Atma Adiguna, supervised by OJK by KEP-018 / KMK.17 / 1992 and members of APPARINDO 60-2001 / APPARINDO / 2019

Life Insurance FAQ

Who needs life insurance?

Life insurance is most useful for people who need to provide security for a spouse, children, or other family members in the event of their death. If your expats in Indonesia that have no dependents or only a spouse as a dependent may not need life insurance at all.

At what age should I get life insurance?

The younger you are, the more affordable it will be. Because your age and your health will affect the life insurance rates you pay.

Is life insurance a waste of money?

No, life insurance is not a waste of money. In fact, life insurance can works as an investment to provide much needed financial security to the family in case of any eventuality or even as an income replacement.

How do you qualify for life insurance?

Life insurance plan is available to anyone, but generally it requires the insured to provide medical records and medical history, sometimes to submit a medical exam. If you are proven healthy and have no clinical issues nor family history of terminal illness, insurance company will guarantee the acceptance or you;re qualified for the policy

What type of life insurance do I need?

Before you apply for life insurance, you should analyze your financial situation to determine how much money would be required to maintain your insurable interest or beneficiary’s standard of living or meet the need for which you’re purchasing a policy. Then after that, find the life insurance that matches your needs.

If you just need a certain amount of time and money, you can choose term life insurance. If it’s more specific like preparing for college, you can choose a child education insurance plan.

Read more about comparison of the life insurance types here.

Is there any life insurance plan for employees?

Yes, there is life insurance for employees in Indonesia.

Most employers offer group-term life insurance as an employee benefit, although other types can also be offered. Generally, in this case the term is for as long as the employee is employed, meaning you can lose your coverage if your job situation changes, like resigned or fired.

How this insurance works is no different than individual life insurance, death benefit will be paid to the beneficiary of the employee. Avrist Insurance offers a policy with this benefit.

Other policies provide total permanent disability benefits, like PRUTotal & Permanent Disablement from Prudential Indonesia. This policy will give a sum of money in case the employee becomes unable to work because of serious injury.

What affects your life insurance premiums?

Many factors can affect the cost of life insurance premium, some of them may be beyond your control, but other criteria can be managed to potentially bring down the cost before applying. These are the factors:

Age: life expectancy is the biggest determinant of risk for the insurance company, the older you are, the expensive it gets.
Gender: women statistically live longer, so they generally pay lower rates than men of the same age.
Smoking: a person who smokes is at risk for many health issues that could shorten life and increase risk-based premiums.
Health: if you’re found to be in better health then you can expect your premiums to decrease.
Lifestyle: dangerous lifestyles can make premiums much more expensive.
Family medical history: if you have evidence of major disease in your immediate family, your risk of developing certain conditions is much higher

Is whole life insurance a good investment?

One thing to remember is that generally whole life insurance costs more. Unless you want lifelong coverage and already maxed out your investments for retirement, whole life insurance might be a worthwhile investment

Do I get my money back if I outlive my life insurance?

Yes, if you outlive your tenure of the policy, the insurer will pay a lump sum amount called maturity benefit. After it’s paid out, the plan closed or terminated.

Can insurance be cashed in before death?

If your life insurance give cash value benefit, that can be liquidated before death. Different insurers have set different cash value growth rates, read carefully what your policy regulates.

What is Underwriting?

Underwriting is when the life insurance company evaluates the risk of insuring you and determines how much your premiums will be based on that risk. The underwriter will evaluate your application and interview answers, medical exam, medical history, and other records.

This process can take four to six weeks, but sometimes longer if they need to verify parts of your application or require any supplemental documentation.

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