Insurance is a risk management tool and will prevent loss or reduce the impact of loss when things go wrong. Insurance can pay for a loss, for expenses and can help to replace stolen or damaged property. It is therefore necessary to assess your risks in daily life. Choose the right insurance policy, read it, ensure that you fully understand it and pay the policy premium.
In Malawi
Insurance on Property and Liability is an option. Life Insurance, Third party Motor Insurance and Pension are compulsory forms of insurance. Not available yet, are long term care insurance, redundancy/loss of job insurance and disability insurance. However, there are products available on the Market as a rider to Life Insurance products, or as a standalone product under Group Personal Accident insurance.
The value of a life cover
With the erosion of the extended family custom of providing safety and security and the complexity of life (that requires an education) the need for insurance protection is highlighted. A life insurance cover gives any offspring the opportunity to further their education after the demise of the breadwinner.
The age to begin
To begin a life cover on a contract on self, you must be above the legal majority age of 18years. However there are products available for child’s education that can be insured in the child’s name.
The choice
The type of insurance purchased will be dictated by the need that is identified. A term policy would be ideal where collateral for a mortgage is the focus; while Permanent Life would be ideal where the need is to provide financial resources to the surviving relative whenever the breadwinner passes on.
The terms
More often the premiums will be payable on monthly basis as they will be from the salary of the policyholder. Where the policyholder earns income once a year as a farmer would, then premium payment frequency will likely be once annually.
The advantage of monthly payment of premiums is it allows the policy holder to enjoy a cash flow advantage and hence, be able to afford insurance without distressing their daily livelihood needs.
My Personal view
As a risk analyst and actuarial statistician in my personal life I tend to appreciate the power of numbers – more things are possible where more people are involved. This also obeys the rule of spreading of risk. What might have been too financially risky for one individual can be possible with a partnership and should anything go wrong, the consequences would be spread amongst partners hence, not eliminate one completely. This way one is afforded the chance to begin again and the strength to stand up and move forward.
My Advice
To a young professional that would like to be in the Insurance business is that it is a financially rewarding career and the availability of numerous educational sources means that acquiring the required qualifications allows one to continue to grow professionally.
Insurance is the safety net that catches us during unforeseen circumstances.
