Life Insurance in Africa – dispelling the top 5 Myths
By Emmanuel Allottey
The coronavirus pandemic has highlighted the importance of maintaining good health and wellbeing. The African continent has a rich history of culture, traditional beliefs and superstition, some of which still exist and influence financial decisions.
Africans once labelled poor are becoming wealthy through opportunities created by business ownership, formal employment and entrepreneurship among others and require insurance products to protect and preserve their wealth and legacy. The decision to buy life insurance in Africa is often met with hesitation, confusion or even denial which can be addressed by providing the right information.
The insurance market in Africa is the least penetrated in the world and the opportunities for growth are tremendous. The top 5 myths that prevent individuals from taking up insurance coverage are:
Myth 1: You don’t need life insurance if your young and healthy: Africa is home to the youngest population in the world and thus taking up insurance early maybe deemed as an invitation to premature death, however future insurability is a factor to consider. The cost of insurance on younger, healthy individuals is inexpensive.
Myth 2: I’m single or Married with no children: Life insurance isn’t just for breadwinners. Even without a spouse or dependents, life insurance benefits can be used to pay off debts such as mortgage or car loan. Life insurance can also help cover funeral costs.
Myth 3: I’m better of saving and investing: lessons from the economic fallout from the coronavirus has shown that investments and savings can be depleted in times of economic downturn. The failure to accumulate adequate Savings and Investments to last through retirement and final expenses may lead to financial discomfort for dependants.
Myth 4: Life Insurance through my Employer is adequate: Some employers provide group life insurance for employees. These policies are usually valid as long as you remain employed with the employer and are non-transferable. With an individual life insurance policy, you are covered regardless where you work.
Myth 5: If you have health issues you cannot get cover: insurance companies typically use your health to calculate rates and coverage amounts, however it doesn’t mean you can’t get life insurance with a pre-existing condition. There are tailored policies specifically for certain health conditions like diabetes or cancer. The coronavirus pandemic has raised concerns over whether life insurance covers deaths from COVID-19, which is largely unfounded as life insurance policies cover infectious diseases, such as COVID-19.
Consult a financial advisor or life insurance agent to explore options for a life Insurance policy.