There are many types of insurance (Read: Types of Insurance in Indonesia), but what often becomes a question is the difference between health insurance and life insurance. What's the difference between the two insurances? Let us discuss.

Difference between Health Insurance and Life Insurance

No Difference Health Insurance Life Insurance
1 Definition The product of insurance that handles insured health problems due to an illness. The product of insurance that provides coverage or protection against unexpected financial losses.
2 Benefit

Provides limited coverage only for the risks of surgery, hospitalization, outpatient care, dental care, daily cash and birth benefits for women.

Protect all costs related to health, such as: hospital costs, doctors, medicines, infusions and operating costs (adjusted to the provisions in the policy).

- To provide benefits such as critical illness (diseases that require long treatment and unlimited costs), accidents resulting in death or total permanent disability, death and old age savings.

- Protect the financial future if you make a living in the family can not make a living anymore (death / total disability).

3 Claim Procedure

- Card system (cashless): insurance companies directly make payments to the hospital.

- Reimbursement system: You will pay the berorat fee first. Later the hospital costs that you spend will be reimbursed by the insurance company after you fill out the form and submit an insurance claim.

- Fill out the life insurance claim form.
- Submit the policy and endorsement / addendum of the original policy.
- Submit a doctor's certificate that provides information about critical illness, terminal illness, total permanent disability, or cause of death.
- Submit certificate of death from the civil service.
- Submit a corpse certificate from the hospital or health department if the insured was taken to the hospital.
Submit a certificate of accident from the police if the cause of death due to an accident.


Well, those are some of the differences in general product features between health insurance and life insurance. You can have both or one of them, adjust to your needs. Here are the advantages and disadvantages of life insurance.

Advantages of Life Insurance

  • Life insurance provides a cash infusion to handle the adverse financial consequences of the insured's death.
  • Life insurance enjoys favorable tax treatment unlike other financial instruments.
  • Death benefits are generally free of income tax for heirs.
  • Death benefits can be tax free if the policy is properly owned.
  • Cash value increases tax deferred for the life of the insured.
  • Cash withdrawals are treated on a first-in-first-out basis (FIFO), therefore withdrawal of cash value up to the total premium paid is generally tax-free.
  • The policy loan is income tax exempt.
  • Life insurance policies can be exchanged for other life insurance policies (or for annuities) without incurring current tax.
  • Have a fairly high investment value development that benefits you.

Lack of Life Insurance

  • Policyholders sacrifice some current expenses to pay policy premiums. In addition, life insurance is usually purchased for the benefit of others and usually only indirectly for other people insured.
  • The value of cash surrender is usually smaller than the premium paid in the first few years according to the applicable policy and sometimes the policy holder cannot recover the premium paid if the policy is submitted.
  • Life insurance purchase decisions and life insurance positions can be complicated especially if the insurance is for housing planning, business situations or complicated family situations.
  • Payment of a premium that is late a few days makes the problematic policy holders even reduce the value of investment and penalties, this is like coercion. Even they do not want to know our financial situation and do not accept any reason.
  • Large insurance discounts if we do not abide by the promise of the initial premium payment period, can even find more than 30% of the retained value because we withdraw the value of insurance that has been paid, even though we did not use the insurance at all.
  • The process of obtaining life insurance can be disruptive and confusing (eg. Can life insurance agents be trusted? Are these the right products and operators? How can you disburse medical funds easily?).

- Reny Wdya Astari. 3 Maret 2016. Asurasni Kesehatan dan Jiwa.
- John Mamad. 10 Perusahaan Asuransi Jiwa Terbaik, Terpercaya, dan Terbesar di Indonesia.

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