Columnists Features

How to enhance insurance awareness


IN THE first place, insurance means a practice or arrangement by which a company or Government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. Insurance provides protection against an eventuality. Cathy Pareto has described insurance as a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium.
Insurance is very important because it allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordance rate. I am saying ‘significant’ because if the potential loss is small, then it doesn’t make sense to pay a premium as protection against the loss.
For example, is it necessary to pay premium for a cell phone costing K100? After all, you would not pay a monthly premium to protect a K100 loss because this would not be considered a major loss for most people.
Insurance is appropriate when you want to protect against a significant monetary loss. Take for instance life insurance. If you are the primary breadwinner in your home, the loss of income that your family would experience as a result of your premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums ensure that if you die, your income will be replaced by the insured amount.
But what would help more Zambians understand insurance better? To start with, it is important to say that the less you know about insurance, the harder it is to choose the right plan for your family or business.
It is therefore vital for all insurance companies in Zambia to carry out massive awareness campaigns in English and local languages spoken in Zambia. In Zambia it is mostly the working class who understand the importance of insurance.
To reach more people who have no understanding about insurance platforms like the church can be used. For instance, insurance companies can conduct seminars and workshops for church leaders who would disseminate the information to all church members.
This strategy has worked in the dissemination of HIV/AIDs information where public campaigns in schools, markets, road shows using famous Zambian musicians like Dandy Crazy, Marcky 11 and B Flow have been undertaken. Apart from that, all insurance firms should invest in publishing brochures that are easy to understand. They should be in simple English and Zambian language for people to easily understand and learn more about insurance.
I have heard some misconceptions that if you insure your life then chances of dying earlier than God’s time are very high. This is absolutely not true. It tells us that people in Zambia are still not well-informed about insurance. Insurance providers should therefore step up their awareness campaigns about insurance to the Zambian population.
Today a lot of Zambians are landlords, but how many have insured their houses or buildings against fire? For example, in Luanshya, Theo’s building was gutted by fire which was started by an electrical fault. Because the building was insured, within months a new structure has been constructed.
So the importance of insurance cannot be over emphasised, we also need insurance experts to go round and convince Zambians on the different types of insurance such as life insurance.
For example, people should be told that dying suddenly in an accident, by unexpected illness or even natural causes can happen at any time. But with life insurance in place, it helps the loved ones pay the mortgage, bills, and college fees after you are gone.
People should be sensitised that life insurance provides tax-free cash to pay estate and death dues. Nothing can replace you in their hearts, but planning ahead with life insurance can make things easier for those you leave behind. In Zambia, funerals are expensive and on average people may spend between K4,000 and K6,000 or even more.
Here I am not talking about extravagant funeral services. This is the average cost of a burial ceremony that will be faced by your loved ones. At an already difficult and emotional time, your life insurance can cover these expenses without further stress.
Most Zambians don’t know about life insurance, that is why all players in the insurance sector should ensure that knowledge on insurance is spread across the country.
We should not just concentrate on urban areas but include the rural areas as well.
Further, the insurance companies should make use of the mass media. Community radio stations can play a very vital and effective role in educating many Zambians about the importance of insurance, This is because community radio stations are close to the people on the ground in nearly all provinces.
It is also important to have well trained insurance sales executives to help disseminate information on insurance.
Insurance companies can also use drama to sensitise people about insurance. Drama is a very effective way of raising public awareness on the affordability, accessibility and value of insurance products for emerging consumers in the country.
In Zambia, we have a lot of people who don’t take insurance on their own, but they get insurance through loans with the various financial institutions.
This means that if a loan is not settled at the time of death, the insurance company will take over the debt.
Insurance companies should also involve communities in sensitisation programmes. Nearly all communities have one or two people who can be entrusted to educate people on the role of insurance to individuals and small-scale business people. This will prove to be very effective since the community will be dealing with people they already know and live with.
In conclusion, I strongly feel that the job of helping more Zambians to know more about insurance should not be left to insurance companies alone.
We all have a role to play because insurance affects all of us. Insurance is just like HIV and AIDS if you are not infected, you are affected. We all need to put our heads together and make Zambia a better place to live in.
We want a country where children, widows and widowers will live a comfortable life after the death of their breadwinner.
We want a country, where people with cars and buildings will have a good sleep, knowing that if their car was stolen or the building caught fire, the insurance firm would come to their rescue and replace the loss.
The author is a Luanshya-based social commentator.

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