Health Insurance Definition Under Indonesian Law

In the modern era, health insurance is undeniably here to stay. More and more people are thinking about protecting their health through coverage. This type of insurance, which provides protection for health, is popular all over the world, including in Indonesia. Health insurance in Indonesia is also governed by legislation. Here is how Indonesian law defines health insurance.

The Commercial Code (KUHD)

The first legal definition of health insurance comes from the Indonesian Commercial Code, known as the KUHD (Kitab Undang-Undang Hukum Dagang). Under the Commercial Code, health insurance is a contract or agreement in which the insurer receives a premium that binds it to the insured. The purpose is to release or relieve the insured from loss caused by the loss of an expected profit, suffered because of an uncertain event.

Law No. 2 of 1992

Another legal definition of health insurance appears in Article 1 of Law No. 2 of 1992. It describes health insurance as an agreement made and accepted by both parties, in which the insurer commits itself to the insured in return for receiving an insurance premium. Law No. 2 of 1992 also sets out the purposes of health insurance, which are:

1. To compensate the insured or premium payer for loss, damage, or loss of an expected profit.
2. To meet liability to third parties that the insured incurs as a result of a sudden event.
3. To obtain payment or compensation for the death of the insured or of a third party connected to the insured.

Law No. 3 of 1992

Law No. 3 of 1992 defines health insurance more specifically as social health insurance. This means the cost of illness is transferred from the insured to the insurer, so that responsibility passes to the insurer, who must cover the costs of, or provide, care and treatment when the insured falls ill, has an accident, or suffers another event that harms their health.

Read also: Health Insurance Definition and Examples

Article 1 of Law No. 3 of 1992 offers another definition of health insurance: protection for workers in the form of cash benefits. These benefits replace income that is lost or reduced because of a particular event experienced by the worker. Such events include work accidents, illness, pregnancy, childbirth, pension security, and death.

We hope this overview of the legal definitions of health insurance gives you the information you were looking for. Secure health protection for yourself and your family by taking advantage of a health insurance product. Good luck!