Is Your Insurance Company bona fide?

Before you sign a life insurance application, make sure that the insurance company would you choose is bona fide. Whatever the insurance products offered, it is only a promise on paper that is only useful if implemented. Bona fide insurance company is not going to disappoint you in when filing a claim or benefit policyholders. They have not even sure it still exists in the next 20-50 years. Remember that life insurance is a long-term engagement. Insurance companies that do not survive for very long time is not feasible is selected.

You remember the financial crisis a few years ago, when many financial companies that collapsed, including insurance companies. They are a lot of money invested in bonds, property and shares collapsed in value to the lowest point. Facing a wave of policy cancellations, they are not strong financially are faced with the difficult choice to refuse / limit the redemption or closing operations because of bankruptcy. As a result, the cancellation of the policy could take weeks because of waiting for funds.

Insurance companies are bona fide can still keep their promise in the most difficult ones. Strong customer confidence makes them the fastest racing after the crisis.

You need to know that there is no deposit insurance on such insurance on savings and bank deposits. If the insurance company goes bankrupt, you could lose your money. Government through the Ministry of Finance is to supervise the health insurance companies on a regular basis. One of the main components of supervision is the financial health of insurance companies, which are indicated in the RBC (Risk Based Capital). RBC numbers are expressed in percent indicates the level of the company's capital adequacy to cover the risks it has. In addition, insurance companies must also obtain approval each time the Ministry of Finance will release new products. Supervision can reduce the likelihood of mismanagement in the management of insurance, but not eliminate it. Until now there are still life insurance company that is financially unsound and can be a time bomb if at any time fail to pay the obligation.

As a prospective customer, you must be smart in choosing. Ask the financial condition of insurance companies to your agent. See the financial statements (balance sheet and profit and loss lapora) last company and learn their status. In Indonesia there are several financial magazines that regularly provide financial and performance ratings of insurance companies. If you do not quite understand in reading financial statements, a predicate "very good" or "good" given an independent institution is enough to convince you that you're dealing with a bona fide insurance company.