Countless times, I have heard people complain about insurance being fraud mostly because they do not get paid when expected. It is not uncommon to find an average Nigeria resenting the purchase of an insurance policy because he believes that it is a share waste of money.
While I acknowledge the fact that a lot of people had fallen victim of failed insurance companies and mediocrity in terms of policy package, ethics and so on, there would be fewer complaints if policy buyers pay more attention to certain details which I am going to share with you here before buying an insurance policy.
Recognize your needs: the most important factor to consider is the purpose you want the insurance policy to serve. You should start by asking yourself these questions: what insurance policy do I need? Why am I buying this Policy? Insurance needs vary from one person to the other. A parent who is looking to sending his toddler daughter to the best university in the world is clearly different from the one who simply wants to ensure that his dependants are well taken care of in the unfortunate but inevitable case of his death. While the former will choose an educational policy with a long-term investment link, the later may choose a term assurance or other similar products.
Talk to an expert: as soon as you recognize your need, the next step is to find the product which best suits your need and which insurer gives the best offer in terms of policy coverage, pricing, financial stamina, flexibility and so on by discussing with an expert. Insurance Brokers have over the years proven to be very efficient in advising prospects of the most suitable insurance policy to buy and the most reputable insurer to patronize. However, ensure that your Broker is duly licensed by National Insurance Commission (NAICOM) and a member of the the Nigerian Registered Insurance Brokers (NCRIB) as we are currently faced with the problem of too many ‘briefcase Brokers’ and few experts.
Understand the Policy Terms, Conditions and Exclusions: Insurance is one profession with its own distinctive jargons which put many off. While there are general terms, there are also specific terms attached to each Policy. Also, just like any other tangible or intangible items sold in the market, there are certain conditions attached to an insurance policy. These conditions must be met before the contract can be valid. For instance, if you insure your bus as a “goods only” carrier, you are not expected to use it to convey fare-paying passengers, you are also expected to always keep your bus in a top shape by ensuring it is serviced and maintained regularly. Perhaps, the most crucial of the three elements with respect to not getting indemnified are policy exceptions. Every insurance policy has certain exclusions which are not covered. For instance, a typical life insurance policy does not cover suicide. However, some exclusions can be bought back by paying an additional premium which is just a fraction of the regular premium.
The terms, conditions and exceptions are contained in what is known as ‘Policy Document’ which is the written contract. From experience, I know that a lot of people are either unaware that they should get this document or simply get it but do not read it. However, reading it and having basic understanding of these terms, conditions and exceptions puts you in a better position to fully take advantage of your insurance policy. Yes, I admit that the policy is full of legal wordings which are not easily assimilated, but part of the benefit of having an Insurance Broker is having your Policy interpreted in a simple manner.
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