Insurance is often ignored in African society. The insurance industry in Africa represents less than one per cent of insured catastrophe losses worldwide, although it is home to almost 17 per cent of the global population” (Statistia, 2021). Over 170 million Nigerians do not have any form of health insurance (Guardian Newspapers, 2020). Low disposable income in the continent is generally regarded as the cause of low insurance uptake. However, we would address the awareness of insurance benefits.
WHY DO YOU NEED INSURANCE?
Risk Mitigation: Are you familiar with the mantra ‘Tomorrow is not promised’? Insurance serves as man’s way of ensuring all hope is not lost when life gives you sour lemons which is probable as life is riddled with risks and possibilities of catastrophic events as profoundly echoed by the covid-19 pandemic. The sense of security insurance provides gives people more room for flexibility and risk exploration. So far it is a risk it can be insured! A lot of businesses globally would have gone under if not for insurance. It is a wise thing to insure your business for risks.
Impact on societal development: Insurance administrators command a huge cash flow from premiums received. These funds create a portfolio of investments and earn interest with which insurance claims can be paid. The investments made by the administrators could be in the infrastructure of the society. This is a win-win for those who have insurance and are fortunate enough not to experience calamity.
Tax Benefits: Premiums paid to insurance companies are tax allowable expenses, although limited to policies wholly, solely and necessarily relevant to the business carried out. This means that if your business pays for a personal insurance policy, the above status will become irrelevant. Also, insurance claims are typically non-taxable (not taxed).
BUSTING INSURANCE MYTHS
Insurance companies do not pay claims: Insurance companies pay claims. In 2020, as a result of the Nigerian #Endsars protest which spiraled into chaos and led to losses and damages running into billions, Nigerian insurers settled ₦5.4 billion in claims relating to the incident.
I don’t need life insurance: We all hope to live long but death is inevitable and no respecter of age hence, it is never too early to get life insurance. Also, there are life insurance policies you can get claims once you reach a certain age.
Premium are Expensive: No, not in all cases. Life insurance premiums especially are even cheaper for younger policyholders. Health insurance, in the long run, is cheaper and more seamless.
With these facts hanging over our heads, insurance is the most logical option to explore in safeguarding our interests, livelihoods, properties and so much more.
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African Alliance Insurance Plc. (2018, December 27). 5 Misconceptions about Life Insurance Held by Nigerians. African Alliance Plc. https://www.africanallianceplc.com/blog/life-insurance/5-misconceptions-about-life-insurance-held-by-nigerians/
Beattie, A. (2021, May 27). The History of Insurance. Investopedia. https://www.investopedia.com/articles/08/history-of-insurance.asp
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Muanya, C. (2020, September 25). Over 170 million Nigerians without health insurance. Guardian Newspapers. https://m.guardian.ng/features/over-170-million-nigerians-without-health-insurance/amp/
Statista. (2021, February 11). Insurance industry in Africa- Statistics & Facts. https://www.statista.com/topics/4206/insurance-industry-in-africa/#topicHeader__wrapper