Health Insurance: Definition, Types, and Functions that must be known


Health insurance is one of the financial products. which is quite familiar to the ears of Indonesian people. In 2018 alone the Central Statistics Agency (BPS). noted that of Indonesia's 262 million inhabitants. as many as 208 million of them, or equal to 79.4% have been covered by health insurance.

This means that out of every 1,000 residents, there are 794 people who already have health insurance. This figure shows an increase when compared to 2017. when only 716 people were known to have health protections among 1,000 residents.

The presence of BPJS Kesehatan began in 2014. is the main reason for the increase in health insurance coverage in Indonesia. It is undeniable that this facility from the government provides convenience. access to the public for health protection.

But the presence of private health insurance, besides BPJS, must also be considered. The reason is, that there are limitations provided by BPJS. e.g. coverage of protected diseases. or the health care you get. That way, private health insurance can complement BPJS facilities to protect you more.

Well, for those of you who are considering buying private health insurance. then it is obligatory for the law to first understand the points of this financial product. Let's see the review!

What is health insurance?

According to Investopedia, health insurance is a type of insurance protection. which includes medical, surgical, medical, and similar costs for the insured or policyholder. This insurance can reimburse medical expenses due to illness or injury. as well as pay for medical treatment costs.

For example, if you are sick with a fever and check yourself into the hospital. After being examined by a doctor, it turns out that you need to examine the laboratory. and also buy medicines for the healing process. Well, the costs you incur during this treatment process. can be completely replaced if you have health insurance.

Yet, the amount of the covered costs and the services provided by health insurance. will vary depending on the benefits listed in your insurance policy. So make sure to read the insurance policy before deciding to buy it.

What are the types of health insurance in Indonesia?

In Indonesia, there are several types of health insurance that you can choose from. speaking, the types are divided into these three categories:

1. Health insurance based on the type of treatment

- Hospitalization.

This health insurance will cover the cost of the hospital when we have to be hospitalized.

- Outpatient.

This insurance will cover the cost of medical treatment. without having to be hospitalized. for example, a doctor's diagnosis, a laboratory examination, or the buying of medicines.

2. Health insurance based on the organizing body

- Government.

This health insurance is issued. and managed by the government, for example, BPJS.

- Private.

Health insurance is managed by a private entity.

3. Health insurance based on the insured party

- Personal.

Health insurance that provides benefits to one individual only.

- Collective or group.

Health insurance provides benefits to a group of individuals. for example, a family or company.

How does health insurance work?

Health insurance works by protecting your finances. from the health risks that may occur during the validity period of the policy. In other words, when you are sick. You transfer financial risks to an insurance company. instead of covering it up by yourself.

how it works this way:

You buy health insurance with a premium of RP 100,000 which is paid every month. So when you get sick and spend money on medical expenses. health insurance will reimburse those costs. The replacement can be cashless or with a reimbursement system. The amount of the fee that is reimbursed depends on the agreement in the policy you have chosen.

Why need health insurance?

As we know, the cost of treatment in Indonesia cannot be said to be cheap. For certain types of diseases, medical expenses can even drain the wallet. to inexperienced. That is why it is important to have financial protection from these risks.

Having health insurance can ease the burden on the mind (and finances) when we are sick. Imagine having to stress about the cost of treatment when we are weak. What is there, the healing process will be longer and the cost of treatment will actually swell.

as the rain comes, even the pain no one knows when it will fall on us. Well, this health insurance functions the same as an umbrella in a bag. When the pain comes, we will not bother and panic about the cost. because we have prepared ourselves in advance. It's better to prevent than to cure, right?

Health insurance terms you need to know

For ordinary people, many terms in insurance are often confused. Even though this is important, you know so that you know very well the benefits of the insurance you choose.

Well, here are some terms in health insurance that you need to understand. for optimal insurance coverage:

- Annuity: payment from the insurance company for the specified time.

- Bancassurance: insurance products offered and sold through banks. Offered to those who are customers of such banks.

- Cut limit: the costs that must be incurred by the policyholder. to cover the shortfall in fees that the insurance company pays to the hospital.

- Acquisition costs: more costs from the customer to the insurance company. arising at the time of issuance of the policy.

- Cash value: the total money the insurance company spends on the policyholder.

- Contestable period: the time allotted to the insurer to cancel the policy.

- Premium leave: an insurance feature that can be used by customers if they want to stop paying premiums for a while.

- Grace period: the grace period given to the policyholder after the due date of premium payment.

- Claim: a claim that the insurance policyholder gives for rights. according to the list of benefits that the insurance company offers.

- Clauses: the articles contained in the policy agreement. which must be followed by the policyholder and the insurance company.

- Lapse: premiums that are not paid beyond the grace period. which can make the policy void or the validity period of the policy stop.

- Policy: insurance agreement document. between the insurer and the insured (customer). which includes general provisions, and or more provisions on insurance products.

- Policyholder: the person who signs the contractual agreement. with insurance companies, as well as people who have insurance policies. become a premium payer. and who has the right to disburse insurance when the insurance agreement expires?

- Exceptions: losses that are not covered by the insurance company. In health insurance, the exception usually refers to the type of disease. which is not covered by the insurance company.

- Premium: the amount of payment approved by the policyholder. and insurance companies to get insurance benefits.

- Risk: a variety of bad possibilities that can befall a person.

- Secondary benefits: more benefits that can be obtained beyond the main benefit.

- Sum insured: the amount of money that the insurance company must pay. in the event of a claim from the policyholder. for the risks covered in the insurance program.

- Waiting period: the waiting period until the effectiveness of the policy. or the time during which the insured can file a claim.

So do you understand what health insurance is and its function for us?

Whatever health insurance you choose. do not forget to understand in advance the above points. before deciding to make a choice. Let's protect your pocket from the risk of getting sick with the best health insurance!