Health insurance is one of the financial products that Indonesians are familiar with. In 2018 alone, the Central Statistics Agency (BPS) noted that out of 262 million Indonesians, 208 million or 79.4 percent have health insurance.
This means that out of every 1,000 people in the country, 794 people already have health insurance. This figure shows an increase from 2017 when it was known that only 716 out of every 1,000 people in the country had health insurance.
The presence of BPJS Kesehatan since 2014 is probably the main reason for the increase in health insurance coverage in Indonesia. There is no doubt that this public entity provides easier access to health insurance for the population.
However, the availability of private health insurance other than BPJS is also noteworthy. The reason is that BPJS has limitations, such as the number of diseases it is protected against or the medical services it receives. So, private health insurance can supplement BPJS insurance to protect you more optimally.
So, for those looking to purchase private health insurance, it is essential to first understand the nature of this financial product. Let’s take a look at an overview!
What is health insurance?
According to Investopedia, health insurance is a type of insurance cover that covers medical, surgical, drug, and other expenses of the insured or policyholder. This insurance can reimburse medical expenses due to illness or injury, as well as pay for direct medical expenses.
Let’s say you fall ill with a high fever and are admitted to hospital. After being examined by a doctor, you find out that you need lab tests and also need to buy medication for treatment. The expenses you incur during this medical process may be partially or fully reimbursed if you have health insurance.
However, the amount of coverage and services provided by health insurance depends on the benefits stated in the insurance policy, so study the insurance policy carefully before you decide to purchase it.
What are the different types of health insurance in Indonesia?
There are several types of health insurance in Indonesia that you can choose from. In general, they fall into the following three categories:
1. Health insurance based on type of treatment
- Inpatient
- This health insurance covers hospital expenses in case you need to be hospitalized.
- Outpatient
- This insurance covers the costs of treatment without hospitalization, such as a diagnosis by a doctor, laboratory tests, or the purchase of medicines.
2. Health insurance based on an organizational body
- Public
- This health insurance is issued and administered by the government, such as BPJS Kesehatan.
- Private
- Health insurance is administered by a private organization.
3. policyholder-based health insurance
- Personal
- Health insurance that provides benefits to only one person.
- Collective or group
- Health insurance provides benefits to a group of people, such as a family or a company.
How does health insurance work?
Health insurance works by protecting your finances against health-related risks that may occur during the term of the policy. In other words, when you fall ill, you transfer the financial risk to the insurer rather than bearing it yourself.
In a nutshell, it looks like the following:
You buy a health insurance policy with a monthly premium of Rs 100,000. When you fall sick and spend money on medical expenses, the health insurance reimburses you for these expenses. The reimbursement can be direct(cashless) or reimbursement by reimbursement system. The amount of reimbursement depends on the contract in the policy you choose.
Why do you need health insurance?
Having health insurance can ease the burden on your shoulders (and of course, your finances) when you get sick. Imagine having to worry about medical expenses when we are physically weak. Instead, the recovery process will be longer and medical expenses will be even more expensive.
No one knows when illness will catch up with us, like rain that comes suddenly. Health insurance works like an umbrella in a bag. When the illness comes, we won’t worry and panic about the costs because we have prepared in advance. It’s better to prevent than to treat, right?
Health insurance terms you need to know
For ordinary people, many terms in insurance are often confusing. This is important so that you are aware of the benefits of the insurance you choose.
So, here are some health insurance terms that you need to understand so that your insurance coverage is optimal:
- Annuity: periodic payments from an insurance company over some time.
- Bank insurance: insurance products offered and sold through banks. Offered to those who are bank customers.
- Deductible: the payment that the policyholder must make to cover the shortfall in costs paid by the insurer to the hospital.
- Acquisition fee: the additional payment made by the customer to the insurer when the policy is issued.
- Cash Value: the total amount of money given by the insurance company to the policyholder.
- Contest period: the time given to the insurer to cancel the policy.
- Premium leave: an insurance feature that customers can take advantage of if they want to stop paying premiums for some time.
- Grace period: a grace period granted to policyholders after premiums have become due.
- Claim: a policyholder’s demand to obtain rights under a list of benefits offered by an insurance company.
- Clauses: articles contained in an insurance contract that must be observed by the policyholder and the insurance company.
- Lapse: failure to pay the premium after the expiry of the grace period, which may result in the cancellation or termination of the policy.
- Policy: an insurance contract document between the insurer (insurance party) and the policyholder (client), including general provisions and additional provisions of the insurance product.
- Policyholder: a person who has entered into a contract with an insurance company, as well as a person who holds an insurance policy, is a premium payer and has the right to cancel the insurance when the insurance contract expires.
- Exclusions: losses that are not covered by the insurance company. In health insurance, exclusions usually refer to types of illnesses that are not covered by the insurance company.
- Premium: a nominal payment agreed upon by the policyholder and the insurance company to receive insurance benefits.
- Risk: the various unfavorable possibilities that can happen to a person.
- Secondary benefits: additional benefits that can be obtained over and above the primary benefits.
- Sum insured: the amount of money that the insurance company must pay out in the event of a claim by the policyholder for a risk guaranteed by the insurance program.
- Waiting period: the period of waiting before the policy takes effect or until the insured can make a claim.
So, do you understand what health insurance is and what it gives us? One of the health insurance policies that you can opt for is Bebas Handal from FWD Insurance. This Shariah-based health insurance offers cheap premiums starting from as low as IDR 75,000.
Despite the low premium, the sum insured goes up to IDR 100 million with extensive benefits including ward charges, doctor visits, medicines, lab tests, surgeries, and much more. In addition, applying for insurance is simple and practical: just fill out the application form and personal details online.
Whichever health insurance you choose, remember to understand the above points first before making your choice. Let’s protect your pocket from the risk of illness with the best health insurance!