life insurance is very important tool to shield young families. But awareness about and its penetration is very low in Nigeria. This despite the ravages of Covid-19 which did free advertisements for Life insurance in many countries. Coronavirus did what no amount of advertisement by life insurers could do, pushing business for them through insurance penetration in many countries such as India, Pakistan and Thailand to global average. From 2.82% in 2019 to 3.2% in 2020 in India and from 2.90 to 3.4 in Thailand in year 2020.
Thanks to the coronavirus pandemic, many more people are purchasing life insurance policies in the South-East Asian region now. According to the Economic Survey 2021-2022, life insurance penetration rose to 3.2% in the year 2020.
Insurance penetration is measured as the percentage of total life insurance premium paid in a year to GDP. Insurance density is calculated as the ratio of premium to population (measured in US$ for convenience of international comparison). But the situation is different in Nigeria due to lack of awareness about the usefulness of life insurance.
The penetration of life insurance is at a low level of 2.4 percent . In the past , life insurance penetration was a little high. But since around 2011, that has gradually declined over the years and even reached its lowest level in a decade in 2016 at 2.2%. Since then it has seen a marginal improvement and reached 2.72% in 2020.
However, the significant rise in purchase of life insurance by Indians in 2020 can also be gauged by the fact that 44.3% of total premium collected by life insurers in 2020 was from new policies.
Take a look at the case of Abike and her husband Joe, and see the usefulness of life insurance.. Life was not so good to the family when they married initially. But soon her husband got a job as construction worker, operating crane. He was well-paid in that company. He also made extra income from his side working with his wife’s elder brother, Ade in his consulting business. Abike stayed at home raising her first child. She hadn’t worked since the husband asked her not to do so when when the baby was born.
As soon as Abike became pregnant with their second child, James started talking about life insurance. He had developed interest for it at a seminar organized for workers in the company where he worked. He was initially hesitant about it. It was not that he wasn’t thinking like an adult; the topic of life insurance was just scary to him. But an old woman in the neighborhood told him how she had been able to send her children to school through the Life insurance her sick husband had bought for them. Then Tony went ahead to buy life policy for the family. The wife was 35 then, pregnant with their yet-to-be-born third child, and the last thing he wanted to think about was either him or his wife dying.
Little did anyone suspected he could die even in 20 years time. About five years after he had bought the life policy, he died at the construction site where he was working . He passed away on a Tuesday in March 2020. The weekend before his death, he had attended a wedding party and had especially good time together with his friends. That Monday evening, he had gone to the house of one of his neighbors to celebrate with him the arrival of a new born-baby. He was there with his wife and children. By that time the wife was already pregnant for the fourth time. The next morning, he left for work without his wife seeing him. There was an important matter he had hinted her the previous night that he would tell her in the morning. But he left while she slept, I’ll never know.
The woman was sitting in a chair in at home when she heard footsteps coming into the house. She turned only to see her elder brother, Engr Paul, who was, like her husband , was a construction worker. It was he who even took her sister’s husband to the company and secured the employment for him as a crane operator. He looked at her and said, “Bunmi, we have a place to go.”
He pulled her out of the chair, and drove straight her pastor’s house. He had called the pastor on phone, informing him about the what happened. The Pastor greeted them warmly. Then he joined them in the car and Paul drove straight to the hospital. There the pastor held her hand and told her that her husband fell down early in the day and was being attended to in the hospital. Bola’s first words were, “How bad?”
Then the brother just squeezed her hand and said he hope everything would be alright. But when they arrived at the ER, the other construction workers were there. It was hard for them to look at her—and that was when she knew that her husband had died. As soon as the burial was over, the insurance account manager turned up at the door, telling her that the policy cover all the children education till they grow up.
Her story is a reminder that once you have a family—no matter your age—life insurance is absolutely essential. And the time is now for insurance companies themselves to drum the importance of this class of insurance to the people.
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