Why Many Nigerians Are Still Confused About Insurance – Many Nigerians are still getting confused about how insurance works and so they get discouraged about purchasing an insurance policy. The statistics of insurance in Nigeria shows that the number of people that have insurance policies is quite low and this was because many of them do not understand how to go about purchasing insurance plan.
Insurance is a very important financial plan for every individual and firm and this is because life is full of risk and uncertainties and so you will have to protect yourself from the effect of these risks and uncertainties. Insurance is more like a cover against risks and uncertainties. It helps to lessen the effect of damage and gives coverage for any loss of property.
In this article, we are going to be talking about the reasons Nigerians are still confused about insurance. We won’t stop there; we are also going to show you some reasons you need insurance in Nigeria and also some types of insurance you should have in Nigeria.
Don’t stop reading at any point so you don’t miss out on any information we will be giving as every information in this article is important.
Some of the reasons Nigerians are still confused about insurance
A large number of Nigerians are still unmoved and very reluctant in taking up insurance coverage even with the threats to their properties, increasing rate of insecurity, threat to their health and life.
Well, interviews and recent talks with some Nigerians have helped us to reveal some of the reasons they are not shaken by the good side of having an insurance plan. Let’s look at some of the reasons for their confusion..,
- Poor knowledge of insurance
The truth is you cannot engage in what you don’t understand and Nigerians are not the kind of people that jump into what they don’t understand. An average Nigerian is very conscious and cautious when it comes to making decisions and so lack of information or sensitization about insurance and what it entails has made a lot of Nigerians confused about insurance.
The banking industry has made extra effort in trying to reach out to the average Nigerian to enlighten them about the importance of keeping their money and other valuables in the bank and so this has helped to boost the public’s confidence in the banking system.
The insurance companies should adopt the same method to reach out to a large number of Nigerians and enlighten them about the importance of having an insurance coverage in a country like Nigeria and also how they can go about it.
- Low disposable income and purchasing power
Many Nigerians earn low income and so they might not see the need to purchase an insurance plan. When they calculate their expenses and bills they would need to meet in a month, nothing will be left to keep as premium and if they decide to take up an insurance coverage, it is going to affect their disposable income.
The money some persons earn is used to meet up with their basic needs like clothes, shelter and food after this, they might not have anything left to pay for insurance and so they get discouraged about taking up any insurance plan.
- How to take up an insurance plan and who to trust with it
When we started our discussion, we talked about lack of information; well, some Nigerians feel lackadaisical about taking up an insurance policy because they don’t know how to go about it and also who to rely on. Many people don’t like what will stress them and so if clear information is not given to them on how to go about the insurance plan and also someone to help them with it, they will become reluctant.
The lack of information has made many Nigerians believe that insurance is for the rich and that is why people need sensitization about insurance in Nigeria.
- The premium insurance companies charge are small to meet up with the payment for the claim for damages
As some others blame it on lack of information, others blame it on the premium charged by the insurance companies. When you have an insurance policy, you will have to pay premium as this is what will make the insurance company render assistance to you in time of loss or damage.
Some people do not trust the insurance companies to meet up with the payment for loss or damages as they believe that the money these companies charge as premium will make it impossible for them to meet them. How would a house that is worth N50million be insured for a premium of N250,000 to N300,000 and you are assured that if the house collapses or there is any damage to it, the insurance company will pay. It is enticing but some Nigerians are skeptical about this.
And sometimes some insurance companies do not meet up with the settlement of claims and this might be due to poor pricing as the premium charged was not enough compared to the property that was insured.
- The insurance companies do not act like the banking industry
If you followed the article, you would see where we mentioned this. You would know that Nigerians love comparison and many of them believe the banking industry and insurance industry are alike and this has made them believe they should be acting the same way but it is not so.
Many Nigerians expect the insurance companies to be more of consumer-focused and adopt some methods like the banks to help them reach out to people where ever they are and no matter who they are. Well, this is true as it will help the insurance companies to reach out to a large number of people and also increase their customer base.
- Nigerians love to copy and they want to see someone that has taken up an insurance plan successfully
The greatest advertisement a company can do is having people talk about them to others and this is one reason Nigerians are reluctant about taking up insurance. They haven’t seen anyone that has taken up an insurance policy without encountering any problem and so they don’t see the need for having one.
Some of the poor people believe that insurance is for the rich and so they don’t see the need to have one except someone they know tell them otherwise and with evidence too.
Some people believe that for something to be good, it must have a lot of testimonies and in Nigeria, if something is good, the respected and prominent people are supposed to be talking about their own policies. What do you think?
Reasons You Should Insurance
Like we mentioned earlier that you cannot predict the future as there are so many risk and uncertainties and so whatever you are doing, you will need to have coverage in case of damages or loss. Having insurance can come in handy and we are going to be looking at some reasons you should have insurance even if it’s one although; we have a number of insurance policies.
- It protects the money you are saving for future plans
Whatever insurance policy you have, it is a way of protecting your savings. When you have insurance for a particular event that occurs, you wouldn’t have to fall to your savings as you already have a cover and so your savings are still intact for other future purposes. These insurance policies are also a way to save money for future events and also plan a better future for your loved ones.
- It protects your income from unplanned expenses
Like we mentioned earlier that life is full of risks and uncertainties and so imagine you don’t have vehicle insurance and you were involved in a motor accident, you will have to pay for the hospital bills and any other damage especially if the vehicle is yours and someone else was hurt from the accident. But insurance will help you cover for any damage or loss from the accident and you wouldn’t have to spend your income on that.
Insurance is a succor to help you finance unplanned or unexpected expenses especially when the breadwinner of the family dies, a life assurance is more like a compensation for the family and loved ones.
- It gives you peace of mind
Nothing like when you don’t have any worries about your home, business or even when you are travelling as insurance is there for you. Having insurance brings you a level of peace and protects your emotional health. When you have insurance in place to cover up for certain events, you mind is at peace and you get to focus on some other things.
- It acts as a succor when the breadwinner dies
We have said this over and over and it is one of the top benefits of having insurance. This type of insurance is called Life Assurance; here, your family members get to benefit from the insurance as it is to cater for them when you are no more especially if you are breadwinner of the family and they are dependent on you. It will take care of expenses like education, rent, and also feeding.
- It serves as security for bank loan
In some cases, life assurance policy can be used as security to collect loan from the bank for business investment.
From all we have said so far, you must have seen that having insurance is very important as you don’t know what might happen next. The situation of the country should even motivate you to have an insurance policy to help cover for any unforeseen events that may lead to loss or damage.
There are number of insurance policies and so you will have to know the insurance policy that suits you depending on your need. You can also use the services of an insurance broker as they will give you details on which insurance policy to go for and how to go about it.
You shouldn’t be reluctant about having an insurance plan as the cost of having one cannot be compared to the cost of not having any.