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Africans and Insurance

Now before you say anything, rest assured; I AM NOT TRYING TO SELL YOU INSURANCE! I am not an insurance agent, I am just an innocent third party with something to say in the matter. First a few terminologies defined.

‘Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness or death in return for payment for a specified premium. ‘

There are two main types; Long term and Short term insurance. Short term comprises of personal liability, vehicle section, household contents, house owner’s insurance, personal accident, etc. And long term deals with the more popular life cover, retirement, endowments, income protection policies, funeral cover policies, etc. The insurance industry in Africa is still growing and is closely linked with economic growth. When people’s incomes rise, so does their insurable assets. (Financial Times) But that isn’t the point of this article. Based on my short stint in the insurance industry I have made a few observations. Firstly, we don’t trust insurance providers! The moment you introduce yourself as an agent, defensive walls go up. There is usually a background story to this. Either you know someone who got scammed by their provider that didn’t pay up when the time came or it happened to you personally. Understood, I would be sceptical too if that had had happened to me. But it is usually that one agent who didn’t explain the policy well to someone who bad mouths everyone. Since we live in a world with so many risks arising everyday, insurance is vital and we can’t do without it. So maybe next time before you sign anything, read the fine print and understand exactly what you are getting yourself into.

The second most important observation I have made is the type of insurance policies taken out. For some bizarre reason funeral policies are a huge hit in Africa. And you know I am right because that is largely what insurance companies advertise about. We all know the Clientele Funeral cover for example, and Assupol and Metropolitan and Botswana Life and Old Mutual. Even if I did a quick survey right now, I am pretty sure funeral cover would come on top as the most popular insurance policy. I have nothing against funeral cover, don’t get me wrong, but I really do not think it should be the priority we make it out to be. What happens after the funeral? What do the kids eat? How do all the dependants of the deceased survive? We put so much effort into making sure that the deceased has a ‘respectable’ funeral service that we forget to look at the big picture. This is where other insurance policies come in; life cover for example kicks in after the policy owner dies. It’s intention is to make sure that whoever is left behind is taken care of. This also where mortgage plan covers would kick in and other investment products. We need to look beyond death because there is life after death, especially for the dependants you live behind. There are also other insurance policies that are never given a second thought. I am talking about car, theft and house insurance. We live in a world where anything can happen, your house could catch on fire or your car gets into your accident. Therefore it is important to protect ourselves against all of these risks. After all that is what insurance is about. Hopefully next time you see an insurance advert you won’t just be entertained but you will also think more deeply on how it could benefit you.

 

4 Responses

  1. Sipho Mahlangu

    Interesting Subject, Some ypepo take insurance on family members that have the highest risk of dying & they get Millions from claims. Ever heard of this?

    1. Yes I have seen this happen. People have found a way around the system. Insurance companies usually have a grace period though after you add someone to a policy of about 6 months before you are able to make a claim to protect against such. But if they die after the 6 months then its a solid claim.

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