Insurance also has various benefits that are classified into the following functions:
a) Transfer of Risk
As a means or mechanism for transferring the possibility of risk / loss from the insured as the "Original Risk Bearer" to one or several insurers (a risk transfer mechanism). So that the uncertainty in the form of the possibility of loss as a result of an unexpected event, will turn into certainty insurance protection (certainty) turns the loss into compensation or claim compensation with the terms of premium payment.
b) Fundraiser
As a collector of funds from the public (policyholders) to be paid to those who experience a disaster, the funds collected in the form of insurance premiums or fees paid by the insured to the insurer are managed in such a way that these funds grow, which will later be used for pay any loss that one of the insured may suffer.
c) Balanced Premium
To arrange in such a way that the premium payment made by each insured is balanced and reasonable compared to the risk transferred to the insurer (equitable premium). And the size of the premium to be paid by the insured is calculated based on a premium rate (rate of premium) multiplied by the sum insured.