By Noella Mutanda
Do you have an insurance coverand have you ever wonderedwhether it is a necessity? And if
so, do you understand what you
are covered for? Do you understand what
insurance is?
The simple answer to the above questions
are:
a) Yes, you need an insurance cover.
b) You need to know and understand
what it is that you are covered for.
c) There is need for you to understand
the needs and benefits of insurance so
as to make an informed decision and
purchase a cover.
Insurance operates on the basis that
losses and misfortunes can occur anytime.
It is informed by the wisdom that it is better
to plan for a rainy day so as to reduce or
manage the impact of a loss, should it occur.
There are also various religious teachings
that underscore the importance of insurance
as a financial planning mitigation tool. In the
traditional Kenyan societal set up, insurance
was also practiced (and continues to be
practiced in some areas) by pooling resources
to help those in need. This practice, however,
is not sustainable in the current life hence the
need for individuals to purchase insurance
covers.
NOT PREPARED
You need insurance because losses and
misfortunes occur from time to time. In most
cases when incidents such as fires, sicknesses,
motor accidents and death occur, you are not
prepared for the financial consequences that
follow. We see cases where people resort to
harambees or borrow money from friends
and relatives who unfortunately, (in most
cases) are often short of money and therefore
do not help much. In extreme cases, we
see cases of families disposing off assets at
throw away prices because of the emergency
situation. It is even sad when such assets are
sold to pay for medical bills and the patient
whose bills need to be paid dies. No doubt
this is double tragedy. And while insurance
will not stop such deaths or losses from
occurring, or people holding harambees,
it definitely helps cushion those who have
suffered losses by availing funds to cover for
the insured losses.
RIGHT POLICY
Life has a lot of uncertainties. By buying
insurance, you transfer possible financial
losses from yourself to an insurance company.
While you cannot avoid the misfortunes
of life, you can be sure that with the right
insurance policy, you will recover from your
financial loss. So as to fully appreciate the
importance of insurance and purchase the
right insurance cover for yourself, you may
need to:
1. Identify your risks and needs and
prioritize them. Remember that not all risks
are insurable and your insurance needs
are specific to you. You should not buy an
insurance product simply because your friend
bought a similar product and it sounds good.
Insurance is not a straight fitting jacket!
2. Discuss your risks and needs with
an insurance company or a broker or an agent
near you. Always compare policy benefits
against premiums of several insurance
companies before you settle on one. A
colleague once mentioned that insurance
intermediaries (brokers and agents) are
like doctors who diagnose and prescribe
medication for their patients in that they
should help you identify that area in which
you are hugely exposed and advice the right
insurance product for you!
3. Match the available insurance
products to your needs and choose the one
that best meets your needs at affordable cost.
When you match your needs with the policy,
it is highly unlikely that you will cancel the
policy before it matures. This is because you
will have understood it and known exactly
that which you are getting into. Once again
remember to purchase only that cover that
you need, based on your risk assessment and
prioritization. Where possible avoid instances
of buying more or less than you need.
PEACE OF MIND
Perhaps the most significant benefits of
insurance include protection of family and
assets and the resultant peace of mind that
one has when they have an insurance policy.
There are also other benefits like savings,
financial security, investment vehicles and
tax relief.
Lastly, remember that your health is your
wealth- sicknesses strike without notice;
take charge of your health and consider
buying a medical insurance cover. The future
belongs to the educated-with education
becoming increasingly expensive; consider
buying a policy for your children’s education.
Accidents occur anytime,anywhere-consider
purchasing a personal accident cover against
disabilities and deaths resulting from
accidents (even those from accidental stair
case falls).
If you Value It; Insure It!