As we know, costs for hospital treatment, or damaged vehicles require large funds, for that insurance is one of the things you need to prepare to keep finances awake and under control. When you start insurance, a term that you will often hear is an insurance policy.
What is an insurance policy? Find out the meaning, benefits, and types in the following article.
Definition of Insurance Policy
An insurance policy is an insurance agreement between the insurer (the insurance company) and the insured (insurance customer). This insurance policy makes a risk transfer agreement, terms, and also a commitment agreement from both parties.
Insurance policies are certainly important for insurance customers to know the contents contained in the insurance policy documents.
This document will be used as a guideline when the customer wants to get coverage rights or claim compensation from insurance. The policy also aims to provide protection to the insurance company if the insurance customer demands rights outside the agreed contractual agreement.
For example, an insurance policy document will provide information on various chronic diseases that will be covered. When the customer demands a claim for a type of illness that is not included in the agreement, the insurance company is not obliged to provide coverage or compensation as written in the policy.
Purpose or Function of Insurance Policy
As explained above, the policy is proof of cooperation between the policy holder and the insurance company. The following is a deeper purpose or function of an insurance policy, namely:
- Knowing the Rights and Obligations of Insurance Users
Policyholders have an obligation to pay premiums. From here the customer has the right to submit a claim in accordance with the written agreement in it.
- Knowing the Deduction Value If Any
Policyholders can find out several important points, for example the value of deductions in motor vehicle insurance. Or there is an excess or nominal difference. The mechanism is, of course, already regulated in the policy without having to ask agents or seek outside information.
- Understanding the Premium Scheme
All losses that occur of course have been regulated in the policy. Policyholders have the opportunity to study and refuse, or ask if they are not in accordance with the premium paid scheme.
- Guarantee for Both Parties
The policy function also regulates guarantees for both parties, both for the policy holder and the company in order to achieve security and mutual agreement.
Insurance Policy Type
The following are some types of policies in insurance that you can find, for example:
- Car Insurance Policy
In this agreement, the car insurance company will bear the loss in the event of an accident, damage to the insured's car.
- Travel Insurance Policy (voyage policy)
This policy determines the risk coverage agreement while in transit. The travel insurance period is not based on a certain time, but based on how long the customer has been traveling. Customers will be protected from the time they leave until they return from the trip.
- Health Insurance Policy
This contract contains a company guarantee to cover the insured's medical care budget in case of illness. Usually there are two types of coverage, namely inpatient and outpatient.
- Life Insurance Policy
In a life insurance policy, the company will set the value of a customer's life with the nominal coverage. then the sum assured can be given to the heirs if the customer dies. This document will later become a requirement for the heirs to make a claim.
- Home Insurance Policy
This document regulates how insurance covers the risk of loss if the customer's house is damaged.
- Estimated Policy (valued policy)
It is a risk coverage agreement with a pre-estimated nominal.
- Unvalued policy (Unvalued policy)
The insured value stated in the policy is used as a maximum limit or a separate unit to determine the nominal claim to be given.
- War Risk Policy
This document regulates to cover the risks of the insured in the war zone.
- Polis see
The agreement in this policy bears the risk of damage or loss of the insured's belongings stored in the warehouse.
What are the contents of the insurance policy
The insurance policy certainly contains important points that must be known by the customer as the policy holder. The contents of the insurance policy are:
- Right to Study Policy
Insurance companies will usually give you time to study the policy. Take the time to understand the terms and conditions that apply.
- Policyholder and Insured Data
You must ensure that the data listed is appropriate and correct in accordance with your personal data.
- Insurance Terms and Benefits
The policy will describe the benefits that you get, for example the period of coverage, sum assured, how to file a claim, and so on.
- Signature
The signature is proof that you have agreed with the content or information contained in the policy.
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