Insurance Policy : Definition, Function, Type, to Legal Basis

Insurance Policy : Definition, Function, Type, to Legal Basis

As one of the investment options, insurance is very preferred by the people of Indonesia. This can be seen from the trend of insurance that is getting easier and attracting the attention of young people. 

Of course this phenomenon needs to be balanced with people's understanding of insurance in order to choose the type of insurance that suits your needs and also insurance companies with proven credibility.

Definition Of Insurance Policy

There are several terms in insurance that are often heard and related to prospective customers who will choose their insurance products, one of which is an insurance policy. Regarding the understanding, function, and other matters related to the policy. What is an insurance policy?

Many are still wrong in interpreting insurance policies and also insurance premiums. These two things are different in meaning even though they are related.

An insurance policy is a legal document that binds the policyholder or customer and also the insurance company in one written agreement. In this agreement stated all the terms, rights and obligations of each party, as well as the provisions of the principle of insurance work to be carried out.

Indirectly, this document is evidence of an agreement between the customer and the insurance company that is legitimate and bound by mutually agreed responsibilities. The insurance policy will protect every right and obligation of the customer and the insurance company.

Definition of Policy Number

When you buy an insurance product, you will get a policy number. So, this policy number is a unique code given to policyholders as an identity that the person concerned is registered as an insurance customer legally and legally. Later this policy number will be used for transaction purposes and customer identity.

By only including the policy number given, the insurance can already find out the complete identity of the customer. The existence of this policy number is also related to the claim and data verification process. You have the right to refuse the insurance policy if the insurance number does not match the number given at the beginning of the contract.

Insurance Policy Function

It is important for customers and insurance companies to understand the overall contents to avoid future losses due to incomprehension of the contents of the type of insurance you buy. So both sides have different functions.

Policy Functions for Customers

Insurance policy has a function for customers, namely:As a written proof of guarantee of insurance of various risks and reimbursement of losses that may occur to the insured written in the policy.As proof of premium payment given to the insurance companyAs authentic evidence to sue the insurer if at any time there is negligence in fulfilling the guarantee that is the right of the customer.

Policy Functions for Insurance Companies

As for insurance companies, the policy functions as follows:As proof of receipt of insurance premiums paid by the insured partyAs written evidence of the guarantees given to the insured. As authentic evidence to reject the claim filed by the insured if it does not meet the requirements of the policy.

Various Insurance Policies

Every insurance company has many insurance products that can be selected by its customers. Various types of insurance policies also have different goals and benefits so that customers can determine which products are currently the solution to problems in investment planning that is being prepared. Here are some types of insurance policies that are generally contained in one insurance company.

Motor Vehicle Policy

Motor Vehicle Policy is intended to provide insurance guarantee on motor vehicles owned by the insured registered. This allows the insurance company to cover the car insurance policy up to the motor with losses that may occur in the vehicle in the future. Travel Police

This travel policy allows the insurance company to provide compensation guarantees as long as the customer travels to a certain destination and at a certain time. So the guarantee is valid from the time the customer departs until returning to the place of origin. Suppose it is used for journalists who will go to cover the news to dangerous areas.

Health Insurance Policy

This health insurance policy is the type that is often found in the community. The insurance company will guarantee the cost of medical care if the customer has an illness or accident. Usually the insurance guarantee covered is hospitalization and outpatient care.

Life Insurance Policy

This type of policy allows insurance companies to measure the value of a customer's life with a certain amount of money. Later the money will be given to the heirs if the customer dies. Life insurance policy covers unit link insurance, pure, to dual.

Home Insurance Policy

This property policy allows customers to get compensation from residences that have suffered damage due to natural disasters, fires, floods, or other agreements written in the agreement.

Policy Are Estimated

The Estimated Policy or Valued Policy allows customers to get compensation from the nominal that has been previously estimated. Police not estimated The Policy Is Not Estimated or Unvalued Policy allows the value of coverage stated in the policy is only used as a maximum limit or there is a separate unit to determine the nominal amount of the claim to be given.

War Risk Policy

This War Risk Policy allows insurance companies to provide life insurance guarantees to customers who are in war zones.

Veem Police

A Veem policy is a policy that allows the insurance company to assume the risk of loss or damage from the insured's belongings stored in storage.

Outline of the Contents of the Insurance Policy

In an agreement that is the basis of cooperation between customers and insurance companies, there are generally several contents that must be included to support the legality and clarity of the agreed cooperation agreement.

There are three important things that are usually included in the contents of the Insurance Policy, namely: Summary of the Policy .In the policy summary, there are several points that must be listed and explained, such as :
  • The name of the insured or appointed policyholder receives
  • Benefits or deputy heirs.
  • Benefits of coverage and its additions
  • Details of premiums to be paid
  • List of guaranteed cash values if any.

General Terms or Policy Special Provisions

In other respects, some general provisions and specific provisions should be included including :
  • Time of coverage Description of the promised benefits
  • How to pay Premiums
  • Premium payment deadline
  • Exchange rates used and currency for premium payment transactions
  • Time recognized as the time of receipt of premium payment
  • Company policy if premium payment passes the agreed grace period
  • Period at which the company is unable to review the validity of the insurance contract
  • Cash value table if any
  • Calculation of dividends if any
  • Termination clauses of coverage from the company or from policyholders, insured, or participants, including the terms and causes.
  • Terms and procedures for filing a claim include the necessary supporting evidence
  • Procedures for settlement and payment of claims
  • Dispute resolution clauses that contain settlement mechanisms in court or out of court
  • Copy of Request Letter and Insurance Registration Form
When registering, the policyholder is required to fill out the registration form and insurance request letter. A copy of this document will be entered into the police as evidence. Examples of Insurance Policies To clarify the understanding of insurance policies and their contents that are generally almost the same, then here is an example of a policy issued by one of the insurance companies.
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