Why Families Need Insurance - Making Risk Protection a Tradition


Saturday, January 16, 2020 / 12:00PM / Excerpt from the PFSeries3 / Header Image Content: @fabphotostudio


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A question many people have repeatedly asked when insurance comes up in discussions is: "What do I gain from having insurance?" The simple answer they get always has been "Peace of mind" and they never seem to understand the connection between Insurance and Peace of mind. 


Having become necessary to explain the connection, most insurance enthusiasts have relied on everyday stories in family settings for ease of clarification.


One Story Told: A story is told about the young family of an Engineer and the Wife, a Banker, working in the South-South geopolitical zone of Nigeria, who had to cope with diverse risks including regular power outage, rampant cases of armed robbery, frequent sicknesses amongst the three children and the pressing challenge of maintaining savings account from their inadequate and irregular incomes.


When the wife got introduced to an Insurance Sales Executive and she heard about the different benefits of insurance, she could not wait to tell her husband, who had better knowledge of insurance from his first job, years ago, as an Agent of a leading insurance company in Nigeria. So, her excitement was short-lived when her husband dismissed the discussion with "Leave those people, I know them very well, they are only interested in making sales. Or have you forgotten that I was once with them?"


Days passed and the Sales Executive kept reaching out to get the confirmed date for the meeting.  Finally, the meeting was fixed for Saturday morning and the Engineer wanted to hear if there was "anything new" about insurance!


The Sales Executive, instinctively, considered that the man was insurance-aware, so she took the long road of starting her presentation from the perspective of the risks that were common in the area. Seeing that there was interest by the couple, she proceeded to mention some of the products that would provide protection and ensure the lovely family was safe from danger.


Now, the meeting became so interactive that as the couple mentioned the risks, the Sales Executive responded with suitable insurance products, and successfully, convinced them to decide to buy Life and Health policies, Comprehensive Home and Motor Insurance policies and Child Education Endowment Plan.


In the end, the Engineer commended the Sales Executive for her professional mien and revealed to her that though he was once an Insurance Agent, he was not half as passionate as she was and asserted that it was easy for them to decide because they knew the company she was representing and she gave them a sense of assurance that they will be secured having their insurance policies from her insurance company.


Ten years after that day, the Engineer and his family have tested and enjoyed the benefits of the insurance in respect of one of their vehicles, which was involved in an accident during the third year of insurance and have continued receiving medical care on account of their health insurance plan that also enabled them to go through with an operation for one of the children at a minimal cost.


There are stories that have not been positive as this, however, it needs to be emphasized that getting insurance plans for your family should be taken very seriously, as part of the broader financial planning process for the family.


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For ease of attaining an even better position than the family of the Engineer did, the following steps are recommended:

Have the End in Mind

Planning a family life can be a hard drill for many of us especially if you have not had any history in your family. Sometimes, it is easier when one of the couples already has some understanding and both agree to bring their best into the relationship. 


Hence, discussing how your family will evolve, where you seek as your destination is critically important. It will determine your collective beliefs, lifestyles and expectations despite your differences.


If, for example, you decided to be environmentalists in the future, you can know that this will entail lots of travelling. You will be required to join organizations that promote such endeavours and can almost determine the kinds of jobs you would be available for and the cities you will live in. Also, looking at the lives of children will be necessary to ensure they have the care and guidance.


It is under such circumstances that you cannot afford to have a financial roadmap for your family without insurance, which will put your mind at peace or stabilize your family when the shocks and shatters occur.


The "What If?" question should not cause any discomfort and doubts about our faiths rather it should put the issues that come as risks daily into our preparation of an effective response management system. 


Too often, families leave it until a crisis comes and we start an appeal campaign, which makes our contributors at that time, the insurers we did not have.


In the end, when the unexpected and unfortunate occurrences arrive, we should have insurers that we can call rather than other families that did not have us in their plan.


Develop a Robust Wealth Plan

A Wealth Plan is simply the plan that a person makes to create and protect possessions that can be inherited by defined beneficiaries. 


Families that understand and have the essence of a Wealth Plan often employ insurance products to develop their plans. The fundamental difference between putting your money in a savings account and an insurance policy is the protection the latter offers in case of death or disabilities.


A wealthy family can become poor if they had no protection through insurance and the active source of income fell ill to the extent that properties have to be sold to raise money for medical bills.


A good insurance program, therefore, helps to take the burden of raising funds from the savings of many years of work or career.


In other cases, parents have bought insurance policies that enabled their children upon attainment of age 18 to inherit part of a robust wealth plan, which gave them that advantageous starting position desired by many Nigerians.



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Hold Presentation Sessions with Family Members

When you take insurance seriously while considering your family's annual financial plan, you will appreciate what having the presentation sessions with family members in attendance does. The Insurance Sales Executive is usually excited about the moment to listen, express knowledge, answer questions and share experiences that deepen the understanding of those in the meeting.


Sometimes, due to the remarkable differences in ages, what the children learn from the session leaves an indelible impression on them and there exists some sense of commitment amongst members of the family. Importantly, a spouse does not have to take a different session to try to convince the other about whether or not to have it.


In the digital era where families have online interactive groups, it makes it easier to circulate updates on the financial plan of the family and specifically on insurance to ensure renewal dates are not missed and policies remain active.


Maintain a Feedback System

It is common practice, indeed complaints, that policyholders do not hear from their insurers after the sale and until there might have been a claim or when the next renewal date approaches. The reason for this, in my view, is that there was no basic agreement or understanding in place to ensure it, and you may wonder why any serious business would require you to have an agreement or understanding on this.


The truth is, your insurer has not violated any law by not maintaining regular communication with you, rather it is in your utmost interest to ensure such an agreement or understanding is in place to enable recognize the first signs of financial stress from the information you will be receiving.


You should not wait for anyone to tell you when you can know, the state of the insurer you are using by simply receiving reports that will prompt you to ask questions to clarify and decide on your policies.


It is really unfortunate to have to be contributing monthly for 10 years on your Life policy, only to discover at the point of receiving your money that the company either posts financial losses or is placed under regulatory order by the regulator, which may make it, a long wait for you.


Feedback is very necessary to enjoy the benefits of insurance and help you ascertain when to determine the relationship and take an exit.


For details on how to get an insurance plan for your family, send a mail to market@proshareng.com 


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