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Rather than helplessly abandon yourself to fate and face the future with fear, there is a lot that people can do to bring more certainty to their lives. The trick is to manage risk.
Using life assurance products to achieve greater peace of mind in the face of uncertainty was the topic of a recent webinar hosted by Coronation Life Assurance.
Titled “How Confident are you about the Future? Protecting yourself from the unexpected,” the webinar shared expert insights from Chris Saigbe, Director of Life Operations at African Reinsurance Corporation; Dr. Tunde Salako, Founder of Africa Insurtech Lab; Abimbola Tiamiyu, Registrar and CEO of the Chartered Insurance Institute of Nigeria; and Kenneth Ifeanyi Essu, Head of Underwriting Life at Coronation Life Assurance. Opening and closing remarks were delivered by Adebowale Adesona, Executive Director, Technical Operations of Coronation Life Assurance and George Odumuko, Head of Customer Experience at Coronation Life Assurance Ltd respectively. The webinar was moderated by Wole Famurewa, Anchor at CNBC Africa.
Key Learning
While life is full of surprises, proper financial planning helps manage uncertainty, creates predictability, and builds confidence and success.
Key Risks
Natural disasters, currency volatility and devaluation, inflation, chronic disease and illness, disability, job loss, premature death, family members passing away, or outliving your savings can all have devastating consequences on a person’s well-being. While risk by its very nature is unpredictable, people can be relatively certain that one or some of these risks will be encountered by most people over a lifetime.
Life Assurance
Fortunately, life assurance has been developed to help ordinary people transfer the financial risks associated with life’s uncertainties to insurance companies.
Practical Tools for Life
Whether you are an individual, a private or public employee, an association, a family, or even a financial lending institution, an appropriate life assurance product exists to help manage the risks you are most likely to face.
Family financial protection products, for example, provide income replacement to help families maintain their standard of living in the event a breadwinner loses their ability to provide. Life assurance products can also help accumulate and invest savings to cover future expenses. Other covers are designed to pay off loans or debt in the event of loss of income, disability, premature death, or any other named risk. Parents can construct life assurance covers to fund their children’s education. Individuals or businesses can construct cover to pay their taxes. Group life assurance products can help businesses attract key skills or provide a financial buffer in the event profits fail or key skills leave the business. Retirement products can ensure that people continue to receive an income throughout their old age, regardless of how long they live. Finally, through re-insurance, even large financial institutions can spread their risk, protecting themselves and their customers and investors from being unable to meet their risk or investment obligations.
And given current currency and economic volatility, life assurance products will even automatically adjust their payment and coverage parameters in line with inflation or depreciation, for example.
We all run the risk, for a variety of reasons, of no longer earning an income. We worry whether we’ll be able to support our families for 40 years or more. We dread unanticipated events. We all wonder whether we might outlive our savings.
Whether term assurance, family income, keyman benefit, group term, whole life, investment, unit-linked, annuity, or critical, chronic, or terminal illness insurance, the insurance sector has developed the tools to help ordinary people manage even the most extraordinary events.
These tools, either on their own or in combination, help people address the full gamut of life’s challenges.
The Sky is the Limit
People can take out as many policies as they need to cover the risks that they face. As long as policyholders continue paying premiums – either weekly, monthly, biannually, or annually – they will receive the agreed assistance up to the amount stipulated for the named risk.
Advice is Key
The host of life assurance products in the market, as well as the very different risks that individuals, families, associations, or businesses face, requires that people consult with accredited financial service providers. Accessed online, over the phone, or in-person, qualified financial advisers take the time to understand individual circumstances, income, and obligations, blending the right mix of covers, or tailoring bespoke policies, to match the risks that different clients face.
Education
The lack of knowledge, low levels of trust, and poor take-up of life insurance products in Nigeria meant that Nigerians suffered disproportionately from the impact of unforeseen events. Nigeria’s financial services sector in general, and Coronation in particular, recognized their responsibility to educate as many people as possible on the benefits of life assurance. The current series of public education webinars hosted by Coronation are examples of the kinds of initiatives underway to broaden the knowledge and use of life assurance products in Nigeria while also extending financial inclusion.
Technology
Exciting technological developments are likely to increase the use of life assurance and other financial empowerment products by increasing distribution online, via hand-held phones, or through third parties. Better data and artificial intelligence are also likely to see a proliferation of new products, covering new risks faced by millennials, generation Zs, and even younger people working in a new globally-integrated digital economy in which covers could be sourced in multiple countries for risks that might occur anywhere in the world.
Conclusion
Since trust is at the heart of the life assurance sector, it is important that Nigerians work with reputable providers with demonstrated track records of paying out on policies. It is also important that people considering life assurance products talk with an advisor, or, ideally, several advisors from different organizations. Advice is free and will help people decide which covers are most appropriate for their peace of mind. In selecting an advisor, however, it is critical that Nigerians work with professionals who take the time to understand the details of their personal circumstances, income, obligations, and risks so that they purchase affordable policies for only the risks that they face.
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