Insurance Every Salaried Employee Should Have

Alongside savings, an emergency fund, and investments, insurance is another essential part of a healthy financial plan. This means you should have insurance as protection, regardless of your profession, including if you are a private-sector employee. So, what insurance is recommended for private-sector employees?

Understanding Insurance

Broadly speaking, insurance is an agreement between an insurance company and a policyholder, in which the insurer receives premiums in return for compensating or reducing losses. In this way, when you insure something, you transfer or share the risk of loss with the insurance company.

So, what can be insured? The answer can easily be seen from the type of insurance product. For example, life insurance and health insurance are arguably the most popular types. Life insurance relates to life, safety, and survival, while health insurance relates to health and illness.

4 Types of Insurance for Private-Sector Employees

If you work as a salaried employee or a private-sector employee, here is a list of the types of insurance that are important for you to have.

1. Life insurance

If you work, you are also a breadwinner for your family. Even if you are not the main provider or breadwinner, you still need the protection of life insurance. Why?

The life insurance you buy does not only protect you, but also your family members. If something unexpected and undesirable happens to you, your family members will receive the coverage or benefits.

Companies usually provide life insurance for their employees. However, if you feel the company's insurance facilities are not sufficient, you can get additional insurance from other life insurance companies.

When you are considering buying a life insurance product, there are several points you should carefully consider, such as:

• Who your heirs are. Make sure you clearly write down the names of your heirs, whether they are your spouse, parents, children, or others.
• Which type of life insurance is right for you: endowment, term, or whole life.
• How much premium is suitable for your financial capacity.
• How large the coverage amount offered is and what the beneficiary will receive.
• How long premium payments must be made.

2. Health insurance

As you already know, health is an extremely important asset in life. Therefore, it is only natural that you need to take good care of it, right? One way to protect this asset is by getting the right coverage through health insurance.

With this form of protection, you will be able to prepare for various health risks that may occur in the future. Moreover, you must admit that medical costs are not cheap, especially if you are later struck by a chronic illness.

As one of the important types of insurance, companies usually also provide health insurance facilities, at minimum through BPJS Kesehatan. Furthermore, BPJS Kesehatan is mandatory for all citizens in the country.

However, just like life insurance, you can still add to and improve your protection by choosing health insurance from private companies. In particular, many private health insurance products offer more comprehensive coverage and even feature double claim and coordination of benefits.

3. Pension insurance

Unlike civil servants (PNS), who will receive a pension every month, you will not get the same benefits once you reach retirement age. Therefore, preparing a pension fund should be one of your priorities in managing your finances.

In fact, you should start as early as possible. The sooner you prepare your pension fund, the larger the pension fund you will generally have later.

So it is no surprise that pension insurance is one of the recommended insurance types for private-sector employees, right? This way, your old age will not be troubled by confusion and worry about how you will meet your daily needs after you stop working.

So how does pension insurance, also known as pension fund insurance, work? Broadly speaking, it works much like insurance in general, in which you pay premiums regularly.

Then, you can submit a claim once you reach retirement age, whether that is normal retirement (upon reaching the retirement age) or early retirement. A claim can also be submitted if you suffer permanent total disability, or if you pass away.

4. Asset protection insurance

As its name suggests, this type of insurance provides protection for your assets, such as vehicles and property. For example, if you have home insurance, the insurer will cover damage or losses to the building and the belongings inside it caused by natural disasters, riots or civil unrest, explosions, sabotage, or theft.

So why is this type of insurance on the list of recommended insurance for private-sector employees? The reason is clear: to protect your assets, especially if you live in an area where damage or loss to property is highly likely.

For instance, if you live in a disaster-prone area where certain disasters occur regularly, the damage they cause to your assets can lead to expensive repair or replacement costs. Asset protection insurance can help cover these costs so you can keep managing your finances with peace of mind.

Unfortunately, asset protection insurance is not provided by companies. In fact, it is fair to say that very few companies offer this type of insurance. Therefore, if you need extra protection for the assets you own, asset protection insurance is certainly a very suitable option to consider.

There are, of course, many other types of insurance for private-sector employees that you can find and consider. However, the four types above generally provide adequate protection for you. In this way, your financial management will not face significant obstacles thanks to the protection that insurance provides.

Of course, choose insurance products from companies that have proven themselves and are legal, professional, and trustworthy. That way, you can truly feel the benefits of insurance as an umbrella and protection for you and your family. We hope the information above helps you choose insurance products that complement your needs and those of your family!