Do you even need insurance cover? Which ones are good for you? Many Ghanaians debate whether they need insurance at all. Sme base these questions on the experiences of other friends and family – sometimes not so great experiences.
Others fall for their ignorance and wonder about the need for insurance. But unless you are unreasonably wealthy with millions of dollars in your liquid accounts, you need insurance to help you manage some of life’s uncertainties.
Speak to the average insurance company, though, and you‘ll find many types of insurance polices on offer. As psychology shows, the more options we have, the harder it is to decide on what we want. And that will push the need for insurance further back for some people.
To avoid that, I’ve distilled these many options into the top 5 insurance policies that you absolutely need for peace of mind.
Life insurance
Technically, life insurance doesn’t benefit you, the policyholder, but it helps your dependents immensely. If you have children or other family members who depend on you for their daily bread, they could lose that support if you’re no more.
No one wishes that on anyone, but you probably know people who died and left their spouse and young children behind. And sometimes, there’s no one to pick up the slack of providing for them. If the deceased had some life insurance, things would be better for their dependents.
Everything about life is unpredictable, and the least you can do for your dependents whom you love is to consider buying some life insurance. Speak to a broker today.
Health insurance
Health insurance has been almost a necessity, and it’s no surprise that many governments over the years have tried to make it work by setting up the National Health Insurance Scheme.
While registering for that is a good first step, that’s not all there is to health insurance. I’ll leave out the challenges with the NHIS for another post, but that only means you need alternative health insurance policies.
That’s why you can’t take health insurance lightly.
Even MTN is trying to make health insurance more accessible, thanks to their partnership with AYO. You need proper health insurance coverage for your life and your family. Which one to pick?
Do your research. Almost all insurance companies offer their unique health insurance policies with varying degrees of coverage. Dig through and see what each entails. As always, read the fine print.
Income protection insurance
With job losses becoming more frequent, it helps to think about some insurance to help you protect your income if the worst happens. Depending on the details, some policies will replace your income, while many others will come close to matching it.
Whatever the option, that’s a good enough safety net to help you stay afloat until you find another job. That reduces the financial pressure on you and your dependents, especially if you’re the only breadwinner of your family.
Sometimes, it may not even be a layoff. For example, if Mr. A gets an accident that incapacitates them for a while, the right income protection insurance cover would give them some money while they can’t work.
Funeral insurance
Okay, not necessarily for yourself, but for your family. These days, funeral expenses in Ghana are no joke. And they keep rising, as the overall costs of goods and services haven’t been falling.
Well, that’s if you have no funeral insurance. Sure, a funeral insurance may not always cover every funeral expense to the last penny, but the benefit will go a long, long way to help lessen the financial burden on you.
When my dad passed, I had a funeral policy with one of the insurance companies.
The benefit I received helped me cover some of the cost. Again, coverage and benefits vary by insurance company, as do the premiums.
Research and find what works for your budget and the terms and conditions of each policy.
Car insurance
Thankfully, the laws of Ghana mandate owners to insure their vehicles. And for car owners, there’s no hiding. If you own a moving vehicle, you need adequate motor insurance cover for it.
You can choose between third-party cover and comprehensive.
With the former, your premiums are much lower. But your cover is also limited. At the core of it, your insurer will only cover costs of damages to third parties, but not your vehicle.
The latter option (comprehensive), as the name suggests, offers comprehensive coverage for damages to your vehicle or a third party’s.
You can always shop around for what different insurance companies offer and which works best for you.
Home insurance
Many people overlook home insurance, but it has immense benefits. Again, every insurance company has different terms and conditions, and it is your duty to know what you’re paying for.
With the right policy and coverage in place, you protect your house against fire, theft, and some domestic accidents.
When some of these eventualities happen, you’ll be glad you’re insured.
Pension annuities
I’ve seen many people enter retirement, only to find the realities aren’t what they dreamed about. The income is less than when they were working, and the costs of living haven’t fallen.
For many retirees, that’s when some health conditions strike.
Worse yet, many people are not in a position to maximize their earnings potential.
In effect, they’re stuck at the same income (with few increments) but spiraling costs. That’s where retirement income insurance would supplement your income.
Aside from what the Social Security and National Insurance Trust (SSNIT) pays you, if you bought a pension annuity, you would receive a monthly income in addition.
I’m surprised many young people don’t think about this, but realize that they won’t maintain their youthful age forever.
Common misconceptions about insurance in Ghana
It means you expect evil
Buying insurance doesn’t mean you wish evil on yourself or someone else. It doesn’t mean you’re praying for ill-health, disability, accident, or death. It only means you’re taking steps to not only protect yourself but also other dependents.
Insurance is expensive
Nope, not having the right insurance is far more expensive. The monthly premiums you pay may seem like a lot of money, but when the unexpected happens, finding a huge sum of money to meet that emergency is far, far, far more expensive.
I’d much rather be insured than not.
Insurance companies are dishonest
Even if you’ve had a bad experience with one company, it doesn’t mean they’re all terrible. Friction may occur over claims payments, and there may be a few differences because the terms and conditions were not clearly understood. Read the fine print before you sign up for any policy.
If nothing happens to me, my money is wasted
Many people wonder what happens if they pay their premiums faithfully for some time and they have no cause to make a claim.
Thankfully, many policies offer cash-back benefits, where you receive a fraction of your premiums if you make no claims. You could also enjoy a discount on subsequent premiums. So it’s not true that your money goes to waste if nothing happens for you to file a claim.
Insurance is inherently a good thing for every Ghanaian
At face value, it’s better to be insured than not. It is an excellent way to manage risk, especially given the many uncertainties of life.
Having benefited from it once, I know the pros far outweigh the cons. My one piece of advice is to read the fine print that spells out your responsibilities, benefits, and conditions around them.
If you get clarity on that and follow every term, you can always get the best of insurance.
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