premium
Also called: iuran asuransi
Money you pay to an insurance company regularly to keep the policy active.
What it means
A premium is a contribution paid by the policyholder to an insurance company regularly, whether monthly, annually, or in a lump sum. In everyday terms it is often called an insurance contribution. The premium amount is influenced by the type of coverage, the participant's age, and the benefits chosen. Late premium payments can make the policy inactive.
Why it matters for families
Families often take out insurance with large premiums without calculating their monthly cash flow. As a result, premiums fall into arrears and insurance benefits are lost right when they are needed. Premiums should also be viewed alongside other costs such as education and emergency funds so the family budget stays balanced.
Example
For example, a family with an income of Rp8 million per month chooses life insurance with a premium of Rp500 thousand per month. Before taking it, they make sure the remaining income is still enough for needs and an emergency fund. If the premium is too large, they can choose benefits that better fit their ability.
Common misunderstanding
Many assume that premiums already paid can be withdrawn at any time like savings. The correction: a premium is a coverage cost, and refunds only occur under certain conditions according to the policy.