Protect your family through insurance

THE insurance sector in Zambia has been growing steadily. As at January 2015, the sector has 33 insurance companies. These are divided in two classes of business: long-term insurance also known as life insurance (11 companies from eight in 2014) and general insurance (22 companies from 17 in 2014). Long-term insurance companies are responsible for life insurance and there are various insurance life products that one can access. General insurance covers other forms of insurance such as motor, property, accident, health etc. It generally comprises any insurance that is not determined to be life insurance.
We are so accustomed to general insurance and, in particular, motor, and one may ask why it is important to have a life insurance policy.
Well, as people grow older, get married and start families, they come to realise more and more that life insurance is an important component of a sound financial plan. This is because life insurance provides money to beneficiaries after a loved one who was also likely the breadwinner who has life insurance dies.
While it is true that human life cannot be valued, a monetary sum can be determined based on the loss of income in future years. Life insurance products provide a definite amount of money (the sum assured) in case the insured dies during the term of the policy or becomes disabled on account of an accident.
Life insurance helps by replacing income, reducing the financial burden on your family of having to continue without you, putting the children through school and paying for your funeral expenses. Life insurance can also be used as a savings plan for the future so that you have a constant source of income after retirement.
There are basically two main types of life insurance, but these have various policies. The first type of life insurance is term life. Under term insurance, you are buying life coverage that lasts for a specific period of time provided you pay the premium. This insurance cover may range from five years, 10 years or to some specified age such as 55 years. Under this policy, the benefit is only paid out if the insured dies while the insurance is running.
The other type is whole life which is a permanent coverage. This type of life insurance also has an investment component which pays the beneficiaries a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can get after a specified time.
Your life insurance plan should be structured to meet your circumstances. Life insurance can be complicated and you should, therefore, always consult a broker or an agent who should explain the various options. Here are a few tips you can use when buying life insurance:
• It should be structured to meet your life circumstances (for example, a single person may need less life insurance than a single person with children or a couple with children).
• Decide what type of life insurance policy you want: term or whole life or a combination of these policies.
• Some policies have an accelerated benefit features, which is a policy provision that lets the policyholder, under certain conditions, collect part of the death benefit before he or she dies.
• Read the policy once you receive it and make sure it is exactly what you ordered: the law protects you to change your mind within 30 days after getting your policy.
• If premium payments are not being made, the insurer will generally send a payment notice before cancellation.  And a failure to pay your premium will cause your policy to lapse or it could be terminated.
None of us know when we will die. It could be today, tomorrow, or years from now – it is inevitable. Life insurance can protect your family from the unknown and help them through an otherwise difficult time of loss.
For more information, queries and concerns regarding pensions and insurance, send us an email: You can also visit our website for more information.

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