To protect lives and secure families against uncertainties, the Chief Executive Officer of Saham Life Insurance Ms Gifty Ama Fiagbe has advocated the need for Life Insurance to be made compulsory in Ghana.
Currently, it is mandatory to insure all vehicles, commercial properties, public liability among others.
Even though workers are expected to be protected by a pension scheme, Ghana’s large informal economy has made it difficult to capture operators in the informal sector under sustainable pension schemes.
Citing Nigeria an example, Ms. Fiagbe argued that a law can be passed to compel persons with more than two employees to sign on to a mandatory Life Insurance scheme to secure the future and also protect workers against unforeseen circumstances.
“I have always said that it is important to make some aspects of Life Insurance compulsory in Ghana. At the last industry meeting with the captains, I said that the new Insurance Bill could have addressed this issue. If we make insurance compulsory for properties, why not life?”, she asked.
Ms. Fiagbe stated that the practice is fast growing among many countries across the world, including African countries to protect workers.
Benefits to informal economy
Providing some benefits of Life Insurance, she explained that Life Insurance can be an important vehicle that can be used to cushion all operators in the informal sector through a financial strategy that will encourage workers to embrace the policy.
She added that Life Insurance can also help the large informal workers in Ghana by providing their families with a financial safety net to fall on when incomes stop flowing.
“We have designed very good Life Insurance policies that we are encouraging people in the formal and informal micro schemes to sign on. These are products that protect people. When you go to Kantamanto we are present there,” she said.
Ms. Fiagbe pointed out that because Life Insurance has several aspects that cater for loved ones of a person that may pass, it serves as the best policy to protect children and spouses of a person that may unfortunately die.
Benefits to the nation
Presently, the coverage of insurance in the financial sector in Ghana is reported to be under 2.5 percent.
Even though the regulator, the National Insurance Commission(NIC) is working to improve the numbers, some observers have maintained that new approach must be adopted to achieve the desire goal.
For Ms. Fiagbe, technology and education is the main bridge to insure the uninsured and whip up interest among ordinary people to sign on to insurance products.
She is of the view that Life Insurance can be a perfect vehicle to migrate a large number of the population in to the financial scheme.
This she said will also create a large pool of resources for long term investment in the country.
“The whole idea about insurance is risk sharing so that people are not disadvantaged in bad times,” she said.
She stressed that a viable insurance industry is a boost for economic growth since it signifies functioning financial system ready to provide funds for the private sector.
“We are doing our part with a lot of products to take care of people and their children in case they die. These products cater for not just education but rent, health and welfare of even extended family members depending on the product that you want”.
Demystifying insurance
Ms. Fiagbe called for the need to engage all stakeholders in the industry to erase misconceptions that people generally have about insurance due to bad experiences.
She urged clients to make sure to ask questions for clarity before signing on to insurance policies.
“I think we the stakeholders need to do a lot of education. Insurance is not complex at all. It all about protecting the future. Some people may have encountered some bad experiences from somewhere and then it affects the whole industry. We have a lot to do in explaining our policies very well to our clients.”
She is hopeful simplifying insurance policies will also help in making it easy for the public to understand and jump on board.
