Jakarta, CNBC Indonesia – Indonesian people’s awareness of having insurance protection is now increasing. This can be seen from the annual growth in the number of national insurance premiums.

Unfortunately, there are still many who misunderstand the purpose of having insurance, namely to avoid financial losses when risks occur in the future. Apart from that, customers are also often mistaken regarding the period for paying premiums and the investment portion, especially in Insurance Products Linked to Insurance (PAYDI). Generally, customers assume that PAYDI investment results can be used entirely for personal consumption in the future.

CEO of Sipundi.id Mada Aryanugraha said that this has caused many customers to disburse the investment cash value that was formed while the insurance protection period was still running and while they were on premium leave (usually they have paid premiums for more than 5-10 years). As a result, many PAYDI customers are dissatisfied because they are required to pay insurance premiums after taking the cash value.

“Their dissatisfaction was more because they felt they had paid the premium according to the time period specified by the policy. But in the end they were told to pay it back afterwards,” said Mada in a written statement, quoted some time ago.

According to Mada, customers or potential customers must understand several important things in optimizing the functions and benefits of PAYDI. The first is the premium payment period, where PAYDI provides protection up to 99 years of age.

This means that in term of time, protection can reach 30 to 70 years, depending on age when initially purchasing insurance.

Apart from that, it is also important to know that during the insurance period, every year there will always be fees that must be paid. When a customer first buys PAYDI insurance when he is 30 years old, he said, the insurance fee will always be charged for 69 years until the age of 99 (if he is still alive).

“As for PAYDI’s own illustration, the calculation of the term refers to the average premium payment period of 10 years, which takes into account the development of investment returns to pay insurance costs until the customer is 99 years old,” added Mada.

Therefore, if the premium is only paid for 10 years and then the customer decides to take a premium leave, then he will not be asked to top up the premium. Provided that throughout the year the investment cash value is always sufficient.

He continued, what must be understood about PAYDI is that investment is not designed for consumption. The investment value in PAYDI aims to pay insurance costs in the future, namely when the customer decides to take premium leave.

“Even if the investment in PAYDI is finally disbursed, there will be consequences for customers having to continue paying premiums in the future,” he said.

Furthermore, he gave an example, one of the customers who had consulted with him, this customer had paid premiums and invested in PAYDI since 2011 and still received protection benefits. This condition can occur because the customer has sufficient cash value to continue paying insurance costs.

Apart from that, with active PAYDI policy ownership, customers also get various added values, such as the freedom to upgrade the policy according to their needs, the opportunity to plan additional retirement funds and inheritance for their family’s future, as well as making investment cash value a complementary source of emergency funds.

“The customer also said that he diligently monitors investment movements and the condition of the cash value generated, and tops up when the cash value is deemed insufficient to pay insurance costs, thereby avoiding the risk of the policy lapse even if he disburses a certain amount several times,” concluded Mada. .

[Gambas:Video CNBC]

(rah/rah)