An Overview about Insurance in Indonesia

insurancepicInsurance can help protect you, your family members and your assets against various contingencies while also providing compensation in case of loss, damage, injury, disability or death. Here, we will take a look at some of the main types of insurance products available in Indonesia:

Life Insurance

This is a type of insurance that pays out a certain sum of money to the insured or their beneficiary(ies) upon the happening of a certain event to the insured. Life Insurance helps cover risks like Premature Death, Illness and Permanent Disability. It can also be used for providing income after retirement.

In Indonesia there are two types of life insurance:

Term Insurance – It offers death benefits. This means that if you die, your nominees will get the sum assured, but if you live past the pre-determined length of the policy, you will not get any benefits.

Permanent Insurance – Permanent life insurance policies are open-ended and also accumulate a cash value that the policyholder can earn dividends from and borrow against or cash-in upon surrendering the policy. Permanent life insurance can be categorized into mainly two types: Whole life insurance and Universal life insurance.

Whole life insurance is meant for satisfying long term goals by offering consumers consistent premiums and guaranteed cash value accumulation whereas, universal life insurance policies focus on giving consumers flexibility in the premium payments, death benefits and a savings element in their policy.

There is also a proposal by insurance companies to come up with micro insurance policies for lower-income people in regencies and municipalities. A number of companies also offer investment-linked insurance plans. A part of the premium is set aside to buy units in an investments fund.

General Insurance

General Insurance protects you from losses and damages other than those covered by Life Insurance. The coverage period for most General Insurance policies is one year and is mostly paid on a one-time basis. General Insurance policies cover a wide range of risks and contingencies; the following are the main categories of General Insurance:

* Motor Insurance
* Fire / House Owner / Householder Insurance
* Personal Accident Insurance
* Medical and Health Insurance
* Travel  Insurance

Health Insurance

Health or Medical Insurance is used for meeting a range of medical treatments covered by your medical insurance policy. There are a number of health insurance products available. Some prominent examples include: Citibank’s New Save in Safe from PT Panin Dai – Ichi Life, PRUhospital Care from Prudential, Health Protection / HospitaLife and Critical Illness Protection from CIGNA, SmartCare Executive / Group Leaver and InternationalExclusive from AXA Indonesia etc.

BPJS Health

The world’s largest state-funded healthcare program, JKN, the national health insurance program administered by the BPJS mandates that every Indonesian citizen and foreigner who has lived in Indonesia for a minimum of six months shall be a member of BPJS in accordance with article 14 of the BPJS Law. Participation by all Indonesians is expected by the latest as of January 1, 2019.Under Presidential Decree No 111, large, medium and small companies must participate as of January 1, 2015 in the national health insurance programme.

Takaful or Islamic Insurance

Takaful or insurance that complies with Islamic Sharia law is also available in Indonesia. Life insurance and investment linked life insurance policies are available. Brilliance Hasanah Sejahtera and Brilliance Hasanah Protection Plus are examples of life insurance takaful products from Sun Life Financial.


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