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Indonesia: Setting Up Life Insurance

Indonesia is one of the countries on the “look out” list for digital nomads, with many believing that Indonesia, Cambodia, Malaysia, Thailand and Vietnam will introduce visas for remote workers. Southeast Asia lost a lot of business in 2020, and attracting expats back to the region is a top priority.

One major concern for expats is obtaining the right insurance when living abroad. Life insurance is one of the most important investments you can make, but the industry remains weak in Indonesia, with forecasts predicting weakness for the remainder of the year.

Lower forecasts may mean fewer market players in the industry, more difficulty obtaining insurance and less of a focus on expats, as many have left the country this year.

Online insurance providers are expected to be the go-to choice for many non-natives living in the country because of the broad spectrum of coverage available.

The Need for Life and Critical Illness Insurance

Travel medical insurance is a common choice when people travel, but it’s not a good choice when you plan to live in the country. A lot of people will also rely on the health insurance from their own country without understanding that they’re likely not going to be covered because they’re residing in Indonesia.

Cheaper medical costs also leave some expats being comfortable paying their own medical costs out-of-pocket.

But if a serious medical emergency occurs, this can lead to high levels of insurmountable debt. This is where obtaining critical illness insurance becomes one of the two most important steps you can take.

Critical illness insurance kicks in when you suffer a serious medical issue. The issue may be a heart attack, emergency surgery, stroke or something equally as serious. If you have insurance, you can be confident that you’ll receive the care you require without concerns about debt or how you’ll pay your bills when you recover.

So, what’s the other insurance?

Life insurance. No one wants to think about their demise, but it’s a protection that you can leave to your loved ones. It’s expensive to make sure that someone’s final wishes are carried out. It’s also expensive to fly your body back to your home country if that’s your wish.

When you take out life insurance, your premiums + money from the insurance company are paid as death benefits.

You can also take out high payout policies that have:

  • Lengths up to 20 years
  • Payouts up to €450,000
  • Premium insurance so you don’t have to pay if you become disabled and cannot work

Taking out insurance is the single most responsible thing that you can do for your loved ones. But you need to make sure that the policy you obtain cannot include exemptions that make living abroad when you perish an issue for your loved ones.

Why Expats Shouldn’t Seek Coverage in Their Home Countries

Whether you’re already living in Indonesia or planning on moving to the country in the future, it may seem like a wise idea to take out insurance policies in your home country. It’s easier to read policies and find insurers in your own country.

Plus, if you don’t speak or write in Indonesian, it can be difficult to enter into an insurance policy.

You don’t know the language, and even exemptions are easy for native speakers to overlook. Being someone that is a non-native makes signing contracts even more difficult and risky.

If you take out a policy in your native country, you benefit from knowing the terms, but you have to be very careful. A lot of policies will have stipulations wherein you’re not allowed to live overseas for more than six months out of the year.

The insurance industry is all about risks, and if you live in another country, the policy will often be void. Your beneficiaries may receive the premiums you paid into the insurance back, but they will not receive the full payout if the insurer finds that you didn’t adhere to the terms.

What should you do instead?

The optimal choice is to find an insurer that specializes in expat term life insurance. Expats can and should have insurance that covers them unconditionally while living life in Indonesia. These policies are written to cover you in up to 200 countries and also cater to expats. You’ll be able to read all of the terms in your native tongue so that you know any exemptions in the policy that can impact you negatively.

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