As Jamaica joins the rest of the world in observing National Insurance Awareness Day on June 28, one financial planning expert, is using the opportunity to remind Jamaicans about 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, remain 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.
As it relates to health insurance, 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.
According to the Insurance Association of Jamaica, individual 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 significant majority of our population extremely vulnerable, with many persons being unable to withstand any possible unforeseen event,” she said. “Accidents and illnesses that put you out of work or possibly cause disability, cannot be predicted.”
Mrs Miller noted that one of the major benefits of insurance is to provide persons with a layer of protection to guard against harsh blows from unfortunate, unexpected disasters.
She pointed out that major illnesses and deaths are devastating for families, especially if it is the chief breadwinner of the family who is affected.
“We have seen this happen in many cases, 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 on health care. Sometimes the person dies and there is no financial protection for the loved ones, who are left behind, because there was no life insurance,” she said.
Mrs Miller noted that part of what is needed is a culture change among Jamaicans, as it regards the importance of insurance, pointing out 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 provides income when here is a covered incident, and prevents you from depleting your savings or forcing you into debt to take care of that incident,” 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 and becoming financially secure,” Mrs Miller emphasised.
She said insurance has three main purposes. It can be used to create, preserve and transfer wealth.
There are several types of insurance, namely, life, health, motor vehicle, critical illness, property, liability, flood, and travel, among others.
Benefits of Insurance
• You will be better prepared for an uncertain future
• You will have some assistance to bounce back after a disaster
• The risk is shared - you are not carrying it all on your shoulders
• May also be used to provide income during retirement
• Pay a little bit today for insurance to avoid paying a lot tomorrow when serious damage occurs
• Never stop paying the insurance premium, because insurance is usually no longer valid if you haven’t made payments
• Get life insurance when you are young, you will get more coverage for less
• Make sure that each bread-winner has some amount of insurance coverage
• Read through the policy thoroughly to familiarise yourself with the terms and conditions
• Review your insurance policies periodically
• Do some research to find out what’s available and compare benefits and premium before purchasing a policy