Andrew is a busy 44-year-old professional in the finance sector. His
wife, a freelance make-up artist insists on a weekend get-away at a resort
somewhere along Lagos-Epe Expressway. On their way to the resort, the
unexpected happens a near-fatal accident almost claimed the life of Andrew.
Though calamity is averted, he is confined to a wheelchair and voluntarily
resigns at work on health grounds. This scenario painted here is a fictional
narrative that is based on real-life situations. Our world is full of
uncertainties, and it takes less than a minute for our fortune in life to take
a downward spiral.  This is one of the
considerations for making an informed decision about insurance. With a family
plan, the insured secure their family’s financial security against the storms
of life.

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In less morbid situations like retirement, insurance is very much
desirable in protecting your
finances for the future. In the past, many conceived retirements as an armchair,
tea-sipping, rocking chair moment in one’s life. But retirees have goals. Some
may want to spend retirement years travelling the world or pursuing new hobbies
without placing the burden of such expenses on children who may have their own
family to cater for. But there is still an inevitable twist to these years- a
declining health. As one advances in age, nothing quite prepares anyone better
for these difficult years than an insurance plan. Putting money in an annuity
is like a pension plan. Many do not think that they need an insurance plan
since they have grown-up children. It has been an age-long African mentality to
use children as insurance. But life, sometimes, teaches very hard lessons about
such expectations.

 

Investing wisely also involves setting the right priorities when one is
still very young. For many young unmarried adults, it is easier to get them to
buy expensive phones or garbs and other elements of glamorous lifestyle than to
convince them to own an insurance plan that works for them. Meanwhile, they are
likely to be less financially strained while single than when married with
children on the same income. At its best, a family insurance can serve as a
safety net when circumstances change. A once-lucrative career may be lost. The
organisation may divest and decide to reduce its staff strengths. Whatever the
case may be, seeking insurance products in one’s younger years is one great
goal to have.

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Without insurance, businesses can
easily wind up. And as seen in the case of the fictitious character of Andrew,
sometimes it just takes one accident to jolt us back to reality that life is
completely uncertain.

 

Consider the devastating impact of the Covid-19 pandemic on
businesses.  In fact, 94 percent of the
Fortune 1000 across the globe, and businesses in Nigeria have been impacted and
are already seeing COVID-19 disruptions.
After its first confirmed
case, Nigeria’s federal and state governments implemented lockdowns across most
cities and states. Borders were closed as well as non-essential businesses.
Nigeria also faced declining remittances and export demand caused by the global
recession. In a survey report titled, “
Impacts of COVID-19 on food systems and poverty
in Nigeria” by Kwaw Andam, Hyacinth Edeh, and James Thurlow, it was reported
that
Nigeria’s GDP fell by 23% during the lockdown. Although the
Agri-food system was functional during the lockdown having been classified as
essential service, GDP fell by 11%, primarily due to restrictions on food
services. Many traders found the transportation of food items as a big
challenge at that period. Household incomes also fell by a quarter, leading to
9% points increase in the national poverty rate. More specifically, the
lockdown policies reduced
Nigeria’s GDP by US$11 billion or 23%
during the 8-week period. 
Instead of worrying about what could happen, liability insurance can
give you peace of mind, enabling you to concentrate on what truly matters – running a successful business.

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Even when one is employed, investing in insurance products can be a
saviour on a rainy day.
According to United Nations’ data, 14 million young people are out of
work in Nigeria, which has one of the world’s largest youth populations, with
more than a third of its 200 million people aged 24 or under.
After the lockdown, the unemployment rate spiked by
6.2% to 33.3% from 27.1% in the second quarter of 2020. The figure now makes
Nigeria move from 5th to the 3rd highest rate of unemployment in the
world. Many companies made very tough decisions to reduce their staff
strengths. Flexible and multi-skilled workers were retained while others were sacked.
Some who are still employed had to accept a pay-cut or delayed salaries. In
situations like these, having family insurance can protect the household from
the grave consequences of unemployment and an unhappy life that can lead to
depression.

About the Author

Olusegun Omosehin is the Managing Director, Life Assurance, Old Mutual
Nigeria.

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