Which is better for young people to choose: life insurance or health insurance?

When faced with questions about the need for insurance, it must be admitted that there are still many young people in their 20s who are still confused or choose to ignore it.

Most millennials at this age view insurance as a need for parents over the age of 40 and only need to think about it when they have a family or when they are more mature. Understandably, young age is still synonymous with health and fitness. As a result, the health risk and risk of death are still considered small.

So far, young people under 30 years of age are synonymous with prime physical condition where the skin is still tight and the body is strong and invited to stay up all night. In this understanding, it is not surprising that there are still many young people who do not pay too much attention to their insurance needs.

It must be admitted, regardless of age group, that the awareness of having insurance in Indonesia is still relatively low.

According to data from the Financial Services Authority (OJK), insurance penetration of gross domestic product (GDP) in Indonesia was only 3.03 percent as of February 2021.

Compared to other countries in ASEAN, this figure is low considering other countries in ASEAN whose penetration reaches two digits.

In fact, the level of health and death risks is relatively high, including among people who are relatively young, productive age under 30 years.

These diseases include hypertension, cancer, chronic kidney disease, heart disease, diabetes mellitus, and stroke.

According to estimates from the Ministry of Health in 2013, as many as 39% of heart patients in Indonesia are those under 44 years of age. In fact, as many as 22% of them are in the 15-35 year age group.

The same data also states that there are also many coronary heart disease sufferers in Indonesia among young people.

Nearly 27% of coronary heart cases occur in the age group under 35 years where as many as 12% of them are experienced by young people under 25 years of age.

Instant lifestyle, unhealthy eating patterns plus high stress levels are a combination of causes that often trigger the emergence of these diseases.

Now the risk is getting higher with the Covid-19 disease pandemic. Almost all age groups have a high risk of exposure. For those who have comorbid diseases, the risk of severity also increases.

Comorbid diseases tend to increase the risk of health problems in patients when infected with certain diseases, thus hindering healing.

Insurance to manage financial risk


Of course you don’t want to, please, while enjoying life suddenly fall sick and get dizzy paying the trivialities of medical expenses? Increased health risks and increased cases of young deaths due to degenerative diseases are indeed a frightening specter.

These risks can actually be managed or minimized. For example, through efforts to maintain a healthy diet, maintain stress levels so as not to poison the body, and adopt a healthy lifestyle in daily activities.

So, how to manage financial risk due to illness or death? Financial planners suggest one easy way, namely by buying the right insurance product.

Insurance is needed by anyone who does bear financial risks, including those who are under the age of three. By being insured, financial shocks can be minimized if you fall ill at any time.

If you have insurance, when one day you fall sick and need treatment, you don’t need to pay for treatment or hospitalization.

It is the insurance company that will pay for these costs. In order to get the benefits of insurance protection, you only need to pay a premium according to the benefits you need.

Therefore, you need to provide a special budget allocation for insurance costs. Currently there are many available insurance with affordable premium costs.

Allocate at least 5% -10% of regular income to buy insurance. Some important insurances to have include life insurance, health insurance, accident insurance, loss insurance for personal assets such as houses, cars, and so on.

However, if the sources of funds are limited, you can make priorities which are more important. Especially between life insurance and health insurance. In order to determine priorities more clearly, it’s a good idea to listen to the following points:

1. Be aware of your profile

Are you the main breadwinner in the family? Will there be financial problems in the family if you suddenly fall ill or die? Before determining what insurance product is right for you, first understand your profile.

Life insurance is needed by those who act as the main breadwinner in a family. Life insurance cannot prevent death. However, life insurance can minimize a family’s financial shock when the main breadwinner suddenly passes away. Families can continue their lives with the provision of sum assured from the insurance company.

So, if you currently act as a breadwinner, it’s a good idea to have life insurance even though in terms of age you may still be relatively young.

Conversely, if you do not act as the breadwinner in the family, having life insurance is actually not a top priority. You can divert the budget to cover other insurance needs.

2. Everyone needs health insurance

Everyone bears the risk of getting sick, therefore equipping yourself with health insurance will be very good for one’s financial management.

Since 2014, the Indonesian people have had a social security system in the health sector through the presence of BPJS Kesehatan. However, because it is a basic service, BPJS for some people may not be sufficient.

Those of you who need more convenience and speed in the treatment process, can consider adding it with commercial health insurance. There are several advantages to having commercial health insurance.

First, the majority of commercial health insurers use a cashless system. When you come for treatment, you only need to bring your insurance card without the hassle of preparing money up front or taking care of reimbursement at a later date.

Second, the service is also faster, there is no need to stand in long queues. Third, you can determine health insurance benefits according to your needs. Starting from dental care, outpatient care, inpatient care, to protection from critical illness.

Currently, there are many choices of types of health insurance available, ranging from the cash plan type or daily compensation, to health insurance with a hospital benefit scheme. Choose according to your needs and budget.

If you really need both, there are also many life insurance products that have riders or additional benefits for health. So, you get two things at the same time, namely life protection and health protection.

3. Select the product as needed

After knowing what insurance you really need, whether health insurance or life insurance, it’s time to surf looking for products on the market. Maybe you are confused about where to start looking. Don’t worry, use the internet to research the right health insurance or life insurance product according to your needs.

You can read the personal finance blog or just go to the insurance product provider company’s website to see the types of insurance products. For example, avrist.com.

Don’t hesitate to contact the insurance provider directly. Generally, insurance providers will contact you directly through their agents to guide you to find the product that best suits your needs.

4. Choose a good insurance provider

Many insurance companies are present in Indonesia. You need to find an insurance provider who has a good track record in terms of service, has an adequate network of health facility collaborations and provides the right product according to your needs.

Well, now you no longer need to be confused between life or health insurance. Happy insurance!

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