Universitas Gadjah Mada
Faculty of Economics and Business

Security is a basic need for every individual, as well as health and life insurance. However, unexpected events can happen at any time, so it is essential to reduce their impact; one way is through insurance. Unfortunately, not everyone, especially younger generations like Insurancederstand the importance of using insurance.

The head of the Financial Services Authority (OJK) of Special Insurance Yogyakarta, Eko Yunianto, shared several tips to consider when choosing insurance products. Before deciding on an insurance product, the public is encouraged to select one that meets their needs.

"The product you choose should be based on your needs, not just because of promotional offers or gifts or because of pressure," he said during the Public Lecture on Financial Literacy and Insurance Industry Development organized by FEB UGM in cooperation with OJK and Mandiri Inhealth at the Pertamina Tower Auditorium, FEB UGM, on Friday (4 October 2024).

He also emphasized the importance of choosing a professional and certified agent when choosing insurance. Make sure the agent assisting with the insurance process is an experienced insurance agent with agency certification. Also, ensure the agent is willing and able to help with insurance matters.

Eko stated that when choosing insurance, it is advisable to choose one that the OJK licenses. Companies with insurance should have a risk-based capital (RBC) of at least 120%.

"Gather information about the insurance company to better understand the capacity of the company you choose, especially in claims services," he added.

Understanding the benefits and risks of insurance products is another critical step before choosing an insurance product. Eko urged the public to inquire in detail about the benefits provided, the conditions required, and the exclusions, often the reason for claim denial by the insurer.

Another insurance tip is ensuring all the information is filled out correctly. Next, make sure the insurance payment period is clear, and carefully read and review the policy and any attachments you receive. Following these steps can minimize losses when choosing insurance for the first time.

On this occasion, Yunianto also emphasized OJK's critical role in protecting consumers through financial literacy education. He also emphasized the "2L" principle in conducting legal and logical transactions. According to him, in any transaction, consumers must ensure that the transaction is conducted with a legal and reasonable company to avoid fraud risks.

Meanwhile, on the same occasion, Mandiri Inhealth's Compliance Director, Marihot H. Tambunan, spoke extensively on insurance and withdrawing funds. He explained that each individual should assess the risks before deciding on insurance. "If the risk is low, such as a common cold, then insurance may not be necessary, and savings or emergency funds may suffice. Insurance is a more appropriate solution if the risk is high, such as a serious and prolonged illness," he explained.

When considering insurance, the public must decide whether to buy life or general insurance. In general insurance, a person can only have one policy from a co-insurance, the same risk; in life insurance, a customer can have more than one policy from different companies.

"Consumers can choose between these two types of insurance depending on their needs," he explained.

At the end of his presentation, Marihot advised young people to take out insurance as early as possible. There are many advantages to getting insurance early compared to when you are older.

"When you are young, the insurance is small and has extensive coverage, which is different when you take out insurance when you are older. Premiums can multiply with the coverage that insurance provides," Tambunan explained.

Reportage: Najwah Ariella Puteri
Editor: Kurnia Ekaptiningrum 

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