Before Buying, Know the Stages and Terms in Insurance Products

 Insurance is one of the important financial service products owned by a person. The reason is, that insurance can protect against risks that may occur in the future.

Life insurance products, for example, can protect family members when the breadwinner dies or is disabled for life.

However, literacy about insurance products in the community is still relatively low. This can cause a person not to receive the maximum benefit of the insurance product.

Therefore, before deciding to buy an insurance product, the application flow and many other important things.

Here are some sequences and important things in purchasing insurance products that prospective customers must know.

1. SPAJ Submission

When someone wants to buy an insurance product, the first step that must be done is to fill in personal data on the Life Insurance Request Letter (SPAJ).

Then, prospective customers need to complete additional documents, such as medical check-up results. This document serves to find out the medical history of prospective customers.

Fill out the SPAJ along with the complementary documents needed to make it easier for insurance companies to determine the sum insured (UP), the range of benefits, and the number of premiums.

Therefore, prospective customers are encouraged to provide information honestly, accurately, and in detail when filling out SPAJs.

If there is information that is hidden or can be interpreted to mean that the customer has a pre-existing condition, the insurer has the right to cancel the policy or not agree to the claim submitted in the future.

A pre-existing condition is a condition in which the customer has been diagnosed or has a history of certain diseases at the time of registering for insurance.

2. Insurance policy

After the application is approved, prospective customers will get an insurance policy, either in physical or electronic form.

An insurance policy is a written cooperation agreement contract between the insurance company (insurer) and the policyholder customer (insured).

The content is related to the rights and responsibilities of both parties and what is guaranteed and not guaranteed by the insurance company. The policy also contains a summary of the insured party's data, the object of coverage, the type of coverage, and the amount of premium that must be paid by the insured.

For the record, each type of insurance has a different policy clause. Specifically for life insurance, the insurance company added a period clause studying the policy.

The clause contains a certain time that the policyholder uses to examine its contents and make a decision whether to approve or not.

Prospective customers have a period of 14 calendar days from the date of receipt of the policy to study its contents.

There is also a life insurance benefit clause that contains the provision of benefits when the insured dies as stated in the policy data, special sum insured provisions for insureds under or up to 5 years old, as well as end-of-contract benefits.

When studying the policy, customers should carefully check the accuracy of the data listed in the policy, insurance benefits, insurance exemptions, and coverage period to avoid misunderstandings that can affect the submission of claims in the future.

3. Insurance premiums, in force, and premium leave

After agreeing to the insurance policy, the customer is obliged to pay the premium according to the agreement. The amount of premium is determined by many factors, ranging from protection coverage, the age of the insured, the lifestyle or medical records of the insured, and gender, to the insured's employment sector.

Premium payments are also made on time according to the provisions stated in the contract. Usually, premiums are paid monthly, quarterly, semesterly, or annually.

When customers pay insurance premiums regularly, their insurance status is active, healthy, and legally binding. In this condition, the customer's insurance policy has an enforced status.

Customers can get protection benefits when there is a risk in the condition. That way, customers can submit insurance claims under the agreement stated in the policy.

However, the policy status risks becoming inactive (lapsed) if the premium is not paid according to the specified deadline.

This needs to be avoided because the lapsed policy will risk the insurance protection owned and the insurance claim cannot be made if the policy status is inactive.

Especially in unit-linked life insurance products, customers can take advantage of the premium leave facility. Through this facility, customers do not need to pay premiums within a certain period without making a lapsed policy.

The premium leave is usually taken when the customer wants to restore his financial stability. Even so, customers need to understand that taking the facility means reducing the value of the investment in the policy.

To be able to take advantage of these facilities, the investment value in unit-linked life insurance must be sufficient to finance premiums, acquisition costs, and administrative costs.

4. Grace period lapsed, and the reinstatement process

Insurance has a grace period, during which the policyholder can pay the premium after the due date without being subject to a fine. During the grace period, the policy is still valid or active (in force).

The grace period varies from insurer to insurer. In general, the grace period ranges from 14-90 days from the due date.

experiencing a delay in premium payments that have passed the grace period, the insurance status will enter into a lapsed condition.

The lapsed status is the opposite of the inforce insurance status. In lapsed conditions, the insurance protection status is inactive.

To reactivate, the policyholder must reinstatement by paying the remaining premiums in arrears.

For information, to make it easier for customers to monitor their policies, Allianz   Indonesia has prepared a digital service for customers, namely Eazy Connect.

Allianz Eazy Connect is an online portal that makes it easy for Allianz customers to access, monitor information, and also manage policies independently anytime and anywhere.

Through the platform, Allianz life and health insurance customers can find out all the insurance benefits obtained, the value of the investment that has been collected, and other information.

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