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5 Types of Insurance that are Right for Children and Their Benefits

JENTIKA.ID -  Just like adults, children also need guarantees and protection from unexpected situations. This protection can be obtained by registering children in the right insurance.

Choosing the right insurance for children can ease the burden on parents when something serious happens to their children. This is because insurance can cut unexpected costs from various situations according to agreement.

Insurance for children is not as popular as insurance for adults. According to Forbes , this is because children tend to be young, unemployed, and have no one to depend on for income.

However, children have the same safety and health risks as their parents. When children do not have protection, of course parents will find it difficult if an emergency situation occurs.

Therefore, to reduce the risk of loss, children should be given several types of insurance that are beneficial for themselves and their families.

Getting to Know What Insurance Is?

Is insurance important? Insurance is a contract represented by a policy in which the policyholder is entitled to receive financial protection or compensation from an insurance company.

This compensation can be given if the policy holder experiences an event as agreed and stated in the policy. So, insurance is an important thing to complete child protection.

American Family Insurance calls insurance an effort to transfer risk. This is because insurance beneficiaries can be relieved or even free from various financial losses.

When policyholders agree to an insurance contract, they must pay their obligations according to the agreed nominal amount. The contracts stated in insurance are legal contracts that are protected by applicable law.

Nowadays, there are various types of insurance policies. Almost all types of protection are now provided by certain companies with different premium values.

Some of the most popular types of insurance include:

    1. Health Insurance
    2. Life insurance
    3. Property insurance
    4. Education insurance
    5. Vehicle insurance
    6. Accident insurance
    7. Travel insurance
    8. Loan insurance.
                However, there are also several companies that offer types of insurance with specific protection.

                Some of them include kidnapping insurance, marital liability insurance, extortion insurance, identity theft insurance, and so on.

                5 Right Insurances for Children and Their Benefits

                The insurance that should be given to children should be useful for both them and their parents in the future.

                Here are 5 insurances that are right for children and their benefits:

                1. Education insurance

                Education insurance is a popular type of insurance given to children.

                Quoted from The Insurance Regulatory Authority (IRA), children's education insurance is a savings tool to collect a certain amount of money until the child reaches a certain age.

                The funds collected will later be used to help pay for children's education. Unlike regular savings, education insurance can only be disbursed according to the due date.

                If the child's parents die or are no longer able to pay the premium as agreed at the beginning, then the responsibility for paying the premium will be waived.

                However, children can still withdraw the funds that have been collected according to the specified withdrawal time.

                The funds collected in the insurance have been adjusted for inflation and increases in education costs. This certainly helps children to continue to attend their target school without being constrained by costs.

                The OJK page states that child education insurance can be started from birth to the age of 17 years with the main target at the age of 0-10 years.

                The amount of education insurance premiums in Indonesia varies, according to the agreement contained in the policy. However, in general customers need to pay from IDR 500 thousand to more than IDR 2.5 million per month to pay education insurance premiums.

                Some types of insurance also stipulate a policy of paying premiums not every month, but every three months, six months, or even once a year. The amount of multi-month premium payments is certainly higher than monthly premium payments.

                2. Health insurance

                As the name suggests, health insurance is insurance that allows policy holders to obtain compensation for health costs.

                In some countries, children's health insurance is mandatory for their citizens. This is because children have the same health risks as adults.

                Some of the benefits that can be received through health insurance in general are:

                  • reimburse medical and surgical costs in whole or in part;
                  • cover the costs of outpatient and inpatient care in hospital;
                  • provides additional coverage for critical illness, accident or emergency;
                  • funding dental care;
                  • get a free annual checkup.
                M Edmunds in America's Children: Health Insurance and Access to Care (1998) found that health insurance can influence children's access to health services.

                There are many cases where children experience serious health conditions due to not getting access to appropriate and fast care because of financial constraints. According to Edmunds, insurance helps overcome this problem.

                The cost of health insurance premiums in Indonesia is relatively cheap. For example, the health insurance program launched by the BPJS government allows people to pay monthly fees ranging from IDR 35,000 to IDR 150,000 per person.

                However, for private health insurance the premium costs that must be paid vary, starting from IDR 350,000 to more than IDR 1 million according to the agreement in the insurance policy.

                3. Life insurance

                Life insurance can be given not only to adults, but also to children. Life insurance on parents may be able to protect children from the risk of death and loss of income.

                However, life insurance for children can also help ease the burden on parents if an unexpected situation occurs that takes the child's life.

                Quoted from Health Markets , children's life insurance is more or less the same as adult life insurance. This insurance benefit allows the family to receive compensation and compensation costs if the child dies.

                Parents can use this compensation fund to pay for funeral, hospital and other losses.

                Apart from that, life insurance for children tends to be profitable because the premium costs are lower than adult insurance.

                Still according to Forbes , apart from being cheaper, purchasing life insurance for children is also faster. This is because most insurance companies do not set medical exam regulations for children under 17 years of age.

                Life insurance products for children in Indonesia are less popular. Some domestic insurance companies tend to offer life insurance for adults or insurance packages for all family members with one policy.

                This causes the premium to be paid to be divided among all family members. Monthly life insurance premiums in Indonesia range from Rp50,000 per person (adult) to Rp500,000 per family member (4 people).

                However, there are also companies that offer higher or lower life insurance premiums according to the policy agreement.

                4. Accident insurance

                Accident insurance is also necessary for children, especially for those who are active outside. Quoted from Assurity , accident insurance for children is divided into two.

                The first is accident insurance and the second is accidental death insurance. Some insurance companies sometimes combine the two in one policy package.

                As the name suggests, accident insurance allows families to receive compensation if the insured child has an accident.

                The compensation will be given according to the conditions stated in the policy contract, including injury, broken limbs, loss of limbs, burns, lacerations, paralysis, and death.

                The compensation provided by the insurance company can be used to pay for hospital fees, surgery, and outpatient treatment.

                Child accident insurance in Indonesia is less popular, so it is usually combined with adult accident insurance policies. The cost of accident insurance premiums in Indonesia itself is relatively affordable, starting from IDR 30,000 to above IDR 500,000.

                Accident insurance can also be obtained together with the purchase of tourist area tickets, payment of STNK or Compulsory Contribution to Traffic Accident Fund (SWDKLLJ), to toll road payments.

                5. Insurance for expensive goods

                Expensive goods insurance can also be given by parents to children who have high-value items.

                Some types of expensive items that are insured can be electronics such as smartphones , tablets, laptops, smartwatches , and so on. In addition, there are also other items such as bicycles, jewelry, gold, and others.

                Expensive goods insurance can provide protection from the risk of lost goods, accidentally damaged goods, stolen or robbed goods, to goods destroyed due to natural disasters or accidents.

                Compensation from lost goods insurance is usually in the form of replacement costs or repair costs for the goods.

                Insurance premiums for expensive goods are generally adjusted to the value of the goods. The value of goods that can be registered for insurance starts from IDR 100,000 to more than IDR 40 million.

                Insurance for expensive goods purchased online can be obtained starting from under IDR 50,000.

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