Fri | Sep 30, 2022

Make insurance part of your financial plan – Miller

Published:Saturday | June 29, 2019 | 12:12 AM

As Jamaica yesterday joined the rest of the world in observing National Insurance Awareness Day 2019, one financial planning expert is using the opportunity to remind persons of the importance of insurance to their overall financial success.

Rose Miller, grants manager at the JN Foundation and head of the JN BeWi$e financial-empowerment programme, said insurance coverage among Jamaicans remains woefully low.

“The low figures are not only in relation to life insurance but all types of insurance, including health, motor vehicle and peril,” she said.

Data from the Ministry of Health show that only 20 per cent of the population currently has health insurance. Eleven per cent of that figure are government workers, and nine per cent are persons employed in the private sector.

Life insurance rates are slightly higher, with just about 28 per cent of the workforce having coverage.

“What this means is that it leaves a majority of our population extremely vulnerable, with many persons being unable to withstand any possible unforeseen events,” she said. “Accidents and illnesses that put you out of work cannot be predicted.”

Layer of protection

Miller noted that one of the major benefits of insurance is that it provides persons with a layer of protection to guard against the harshest blows from unfortunate unexpected disasters.

She pointed out that major illnesses and deaths can, in many cases, be devastating for families, especially if it is the breadwinner of the family who is affected.

“We have seen this happen in many families, where households are severely retarded and persons set back years financially because a family member becomes ill and they are forced to spend all their life savings to restore their health. Sometimes the person dies and there is also no financial protection for the loved ones who are left behind because there was no life insurance,” she said.

Miller noted that part of what is needed is a culture change among Jamaicans as it regards the importance of insurance and that this is possible with increased financial education.

“The first thing that many people will tell you is that they don’t have money for insurance, but what they don’t realise is that having insurance, in many instances, actually saves you from spending money and depleting your savings or forcing you into death to take care of these eventualities,” she said.

“We must raise the awareness among our population to the point where ­persons will begin to understand that insurance is a critical plank in building wealth ... ,” Miller emphasised.

She said that insurance has three main purposes: to create, preserve and transfer wealth.

There are several types of insurance: life, health, motor vehicle, critical illness, property, liability, flood, and travel, among others.

Benefits of Insurance

n You will be better prepared for an uncertain future .

n You will have some assistance to bounce back after a disaster.

n The risk is shared; you are not carrying it all on your shoulders.

n May also be used to provide income during retirement.

General Advice

n Pay a little bit today for insurance to avoid paying a lot tomorrow when serious damage occurs.

n Never stop paying the insurance premium because insurance is usually no longer valid if you haven’t made payments.

n Get life insurance when you are young; you will get more coverage for less.

n Make sure that each breadwinner has some amount of insurance coverage.

n Read through the policy thoroughly to familiarise yourself with the terms and conditions.

n Review your insurance ­policies periodically.