Life Insurance

Life Insurance is the company, which sells Insurance Policies.

Life Insurance is a safeguard against the income loss that could happen if the insured person dies or passes away. The proceeds are forwarded to the designated beneficiary and he or she is shielded from the financial consequences that could arise from the insured person's death.

Life Insurance is an agreement or contract between the Insurance Company and the policyholder, in which the Insurance Company assures the payment of a particular amount of money if the insured person dies or passes away. For this, the policyholder pays a specific amount at regular intervals, which is known as the premium. In case of a Life Insurance Policy, the Designated Beneficiary receives the benefit if there is occurrence of an event, which is insured and the policy covers the event. For being a Life Policy, the primary condition is that the insured event has to be based upon the life (lives) of the persons whose names are present in the policy.

The insured events that are covered in a Life Insurance Policy are:

• Death
• Accidental Death

The following conditions are not covered but they can be insured by other insurance forms or riders on Life Policies:

• Diagnosis of a terminal illness
• Diagnosis of a critical illness
• Disability arising from ill health
• Necessity of Long Term Care
• Permanent Disability

Life based policies can be categorized into two main types:

Investment Policies: The primary goal of investment policies is to support capital growth in terms of payment of single or regular premiums.

Protection Policies: It is planned to offer benefits in forms of lump sum payments when there is an occurrence of a specific event.

In case of a Life Insurance Contract, three parties are present: the Insurance Company, the insured person, and the policyholder. However, most of the times the policyholder and the insured person is the same.

When the insured person dies or passes away, satisfactory death proof has to be submitted for the receipt of claim.

Life Insurance can be categorized into two main classes: Temporary and Permanent or following subdivisions: Term, Universal, Whole Life, Variable, Variable Universal, and Endowment Policies.

Temporary (Term): Temporary Life Insurance (Term Assurance According to British English) offers Life Insurance Coverage for a stipulated time period for a certain amount of premium.

Permanent Life Insurance: This type of Insurance Policy is active till the time of maturity, but if there is a failure on behalf of the policyowner for the payment of premium when it is due, the policy will expire. Permanent Life Insurance can be generally categorized into three types:

• Whole Life Coverage
• Universal Life Coverage (UL)
• Endowment Policy

Indonesia Insurance

Though a variety of insurance products are available in the country, still the social health insurance plays a significant role in the insurance industry.
The Directorate of Insurance, Ministry of Finance has been acting as the regulatory body in Indonesia Insurance.

Insurance Companies In Indonesia

Leading insurance companies in Indonesia on the basis of their gross written premiums are as follows:

Life Insurance Companies In Indonesia

Major life insurance companies in Indonesia are as follows:
* AIG Lippo Life Insurance
* Prudential Life Insurance
* AIA Indonesia Insurance
* Manulife Indonesia Insurance
* Panin Life Insurance
* Jiwa Sequis Life Insurance
* Central Asia Raya Insurance

Non-Life Insurance Companies In Indonesia

Major Non-Life Insurance Companies In Indonesia is as follows:

• Sinar Mas Insurance
• Tugu Pratama Insurance
• Astra Buana Insurance
• Central Insurance
• Allianz Insurance
• AIU Indonesia Insurance

Affordable Insurance

Affordable insurance policies can provide compensation for potential future losses, there remain a wide array of insurance companies but selection of the most suitable policy is extremely crucial. There are different insurers who offer alluring schemes and discounts but before investing for in any kind of insurance policies,it is prudent to search out the affordable insurance policy that safeguards during future crisis. Many insurances are easy to avail and also provide extensive coverage. Quest for affordable insurance prevail among the insurance purchasers and considering the fact,both general insurance and life insurance companies are facilitating clients with alluring offers.

Affordable health insurance:

There are plenty of affordable health insurance policy providers,it is secured to rely upon the companies who have experience in insurance industry. There are specific types of insurance options designed to cater particular individual needs. Some of the options are as follows

Maternity coverage
Student health insurance
Travel insurances
Dental insurances

Affordable life insurance:

These are tailored to provide adequate financial support to the family members ,insurance protection is truly necessary as unknowingly necessity of adequate money for treatment may arise.

Affordable auto insurance:

Affordable auto insurance can protect and be of immense help during any kind of road accidents. At present,affordable credit insurances are in high demand. Affordable fire insurance, liability insurance,casualty insurance, mortgage insurance, locked funds insurance, property insurance, political risk insurance, disability insurance, boiler insurance, business insurance are few other types of insurances.

Insurance corporations have close association with insurance agents and they also maintain a diversified network of insurance brokers. For better risk management it is prudent to have a clear idea about the affordable insurance offers from leading insurance companies. Almost all of the affordable insurance policy providers have web portals and many of them offer online quote for client's convenience and these can be of great use during benchmarking. It is also a good idea to consult with the qualified insurance agents as they are experienced and have clear insight about the accurate low cost insurances. Different insurance companies offer various schemes to increase the number of policyholders and it is indeed a great idea to keep an eye on the prevailing insurance options

Business in life insurance faces heavy challenge in Indonesia

Business in life insurance is facing heavy challenges in Indonesia with financial problem and difficulty in attracting investors. The root of the problem is decline in interest rate and business uncertainty amid low purchasing power of the people and the fact that insurance is not quite popular in the country.

The rupiah fall lately against the U.S. dollar worsened the condition. The amount of premium and income from investment decline. Total amount of premium was only around 1.25%-166% of the country' Gross Domestic Product (GDP) in the 1997-2001 period. In 2002, premium was Rp 11.3 trillion or an increase of 9.7% from the previous year. In 2003, insurance industry grew by an average of 30% as against 70% in 1997.

The collapse of property business and liquidation of many banks contributed to the difficulties faced by insurance companies as the impact was bad for investment in certain sectors. Fortunately income in interest on deposits helped maintain growth.

The rupiah fall against the dollar caused an increase in costs burdening the business sector including insurance. Meanwhile, limited capital makes it difficult for insurance companies to cover large insurance forcing them to seek reinsurance with foreign partners.

Low economic growth and an increase in unemployment rate further weakened the purchasing power of the people in general. Based on official data, only 16% of the country's population of 215 million hold life insurance polish.

Life insurance companies compete not only among themselves but also against banks and mutual funds because of the absence of clear limits of business areas among the financial companies.

For example, the products of link unit and mutual fund are almost the same with market. The different lies in the regulators. Mutual fund is under the Capital Market Supervisory Body (Bapepam) and link unit is under the Insurance Directorate of the Finance Ministry. In other countries the regulators of the two products is one.

Slow growth

The law No. 2 in 1992 said life insurance companies offer service in meeting risk of death. Therefore, life insurance companies could operate in life insurance, health insurance, accident insurance and found and manage pension fund.

Life insurance offers an alternative for the people to invest. Life insurance generally has a longer term than loss insurance. With longer protection of 5 to 30 years its investment has longer term such as in property, direct participation. Bonds and mortgage loan.

Despite the fact that most life insurance companies are facing liquidity problem, there has been no life insurance company declared bankrupt

or liquidated as the case with many banks. In addition, despite incentive offered by the government for merger no life insurance companies have comply with the call for merger.

Based on data at the Indonesian Insurance Council (DAI), by the end of 2003, the country had 55 life insurance companies including a state-owned company, 33 Indonesian private companies and 21 foreign joint ventures. The companies had around 80,000 agents altogether. Business in life insurance in the country grew sluggishly. The number of companies did not change much from 53 in 1999 including a state-owned company, 40 Indonesian private companies and 12 joint ventures.

In the past five years, the number of joint venture life insurance companies grew to from 12 to 21 units. On the contrary the number of Indonesian private companies declined from 40 to 33. The decline was likely caused by financial difficulty to resume business. Some of them were taken over by foreign investors.

Performance declines:--Business restriction imposed on some companies

The vulnerability of life insurance industry is indicated by the growing number of companies included in the list of Business Activity Restriction from year to year. The restriction was imposed on companies having a Risk Based Capital (RBC) of less than 100% as set by the finance ministry in 2003. The minimum RBC was raised to 120 in 2004.

Sufficient amount of capital is needed to cover risks of losses as a result of deviation in the management of assets and obligations. Therefore, financially powerful, companies will survive amid the situation such as prevailing at present in the country, but small companies will most likely collapse without additional capital.

Legal uncertainty is also a factor slowing the growth of life insurance companies in the country. For example, the finance ministry allows...