8 Best Life Insurance in Indonesia

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.

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.

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.

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 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.

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.

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.

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 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.

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.

Procedure:

1. Beneficiary reports/contacts to the insurer about the death of the insured, not more than 7 days after the event date
2. Beneficiary sent the needed claim documents to the insurer
3. The insurance company will do a verification the claim documents
4. 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

Procedure:

1. Collect all the claim requirements document
2. Sent the documents to the insurer
3. The insurance company will do a verification the claim documents
4. 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

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.

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.

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

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 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.

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.