Pak Ali is the father of a child named Jeni, who is almost 4 years old. Until now, Pak Ali has been the sole provider for the family's living expenses. However, an unexpected event has occurred: Pak Ali had an accident on his way home from work and suffered Total Permanent Disability, rendering him unable to work and provide for his family. Moreover, Jeni is about to start kindergarten soon, and the cost of education is quite high. Meanwhile, his wife, who has never worked before, would find it difficult to secure a job in the current competitive job market. This situation has left Pak Ali feeling lost.

At times like this, insurance plays a crucial role in securing the financial future of the family. Insurance companies cover financial losses in case of risks according to the insurance product they have subscribed to. This includes covering future living expenses for the insured and beneficiaries as per the policyholder's agreement with the insurance company. Insurance is based on a simple yet complex idea of managing future uncertainties by protecting individuals from risks that may not occur in the near future but are always possible.



This idea has accompanied the rise of commercial economics and has significantly contributed to the development of modern society by facilitating free-market economies and individual progress. Insurance allows everyone to build a more secure future without worrying when making decisions and planning for their future.

The insurance industry that emerged from this idea is based on the following basic principles:

  • The need to ensure a stable and guaranteed economy in the future
  • Principle of solidarity among similar groups exposed to the same risks
  • Trust relationship between insurance providers and those in need of insurance based on transparency
  • Economic transaction that is replacement-based, where services are paid for in advance in the form of insurance premiums, and then the insurance provider is required to indemnify losses when an unpleasant and anticipated event occurs according to the prior agreement.


There are various types of insurance agreements, which are fundamentally the same across countries because insurance exists to meet fundamental and universal needs for guarantees and protection. One example is life insurance, a contract in which the insurance company pays a certain amount either in a lump sum or periodically over a specified period, if an event involving loss of life occurs or results in the policyholder no longer being able to earn a living, in exchange for a premium as compensation for the policyholder. Additionally, there is pension funds, which is a specific category of insurance policy intended for welfare-related purposes, and thus controlled in national Retirement and Welfare rules and generally long-term investments.

Life Insurance

Life insurance is a contract in which an insurance company offers to pay a certain amount either in a lump sum or periodically over a specified period if an event involving loss of life occurs, in exchange for a premium as compensation for the policyholder.

In addition to specific risks, insurance premiums also cover all costs associated with the procurement and administration of the agreement made, or can also be called operational costs (in business terms known as loadings). The parties involved in the agreement include: insurance companies, insured parties, policyholders paying premiums, and beneficiaries, those who receive compensation from the insurance company. The insured party, policyholder, and beneficiary may be the same person. Such agreements can be divided into two conceptually different categories: pure risk guarantee policies and pure investment policies. On the other hand, pension funds are a specific category of insurance policy intended for welfare-related purposes, and thus controlled in national Retirement and Welfare rules and generally long-term investments.