“Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insured’s beneficiaries when the insured dies or after a set period”. Investopedia.

In my previous articles, more emphasis was placed on the important role which life insurance policies play in both our lives and the economy at large.

Growing up back then, we used to hear that spouses would not want their partners to know that they had life cover for fear of being “eliminated”.  We also note, with regret the number of cold blood murders in developed countries as a result of people trying to access insurance money through policies which they know are beneficiaries.

This all portrays the importance of life cover to humanity, yet we have only about twenty to thirty percent of our population covered.

In the African society at large, insurance is seen as a luxury with many misplacing their priorities such as having a monthly budget for beer ahead of life cover.

But when death befalls us, the very first question to be asked by surviving relatives is:

“does he/she have a policy?”

And the obvious reason why this question gets asked is that we are all aware that policies will relieve the burden by either taking care of funeral expenses or by taking care of the surviving members.

Life insurance is therefore perceived as a luxury by many because it is seen as expensive and conditions for obtaining one are strenuous such as undergoing medical examinations, having to reveal one’s income and answering financial questionnaires and so on.

The honest truth which the general public should know is that life insurance is solely based on mortality. It then follows that the younger you are, the cheaper the premiums and vice versa. Women also enjoy discounts when it comes to premiums as compared to men due to mortality reasons.

Therefore, it is highly advisable for people to take life insurance policies when they are still young so as to obtain favourable and competitive premium rates. With age again, we know people become susceptible to certain diseases and when the application is subjected to underwriting, the outcomes are as follows: accepted at ordinary rates, accepted with a premium loading or declined or deferred.

The notion that we will take life cover when we have a family is flawed in many ways.

A family person is always carrying a heavy burden in terms of responsibilities and will always find it difficult to take insurance cover. Single people in many cases are young people with extra income which can be channelled towards life cover and at a young age can afford huge sum assured.

Even without a family, one can still nominate beneficiaries of their choices who can benefit from the policy in the event of death.

It must also be noted that there are other factors that are considered when determining a premium but the foregoing accounts for the larger part of it.

People who are fortunate enough to be in employment can also have affordable coverage through their employers. Premium rates for group schemes such as group life assurance, group funeral schemes or group pension schemes are very competitive. Group scheme policies also come with free cover limits which are the amount of coverage that each individual policy member can have without any requirement of medical evidence or underwriting.

Depending on scheme rules, both employer and employee contributions towards the policy though rightfully the policy belongs to the employer. The downside to this type of cover is that individual members cannot cede a group policy as opposed to an individual policy. Also, the cover is lost when one leaves or resigns from the employer.

Going forward, consideration and more effort should be placed on concertizing younger generations on the need and advantages of taking life cover in the early stages of their working lives.

About the writer: Paradzai Masvingise is an Insurance practitioner with vast experience in the insurance industry. He can be contacted on email: [email protected] or whatsapp +263772955507