Life insurance is a contract between you and an insurer. It offers financial protection against the risk of death, in exchange for regular premiums paid to the insurer.
In return for regular payments, the insurer agrees to make a lump sum payment or series of payments to your family, or other beneficiary, should you die while the policy is in force.
Life insurance can be used to provide money for final expenses and debts such as mortgages, credit cards and loans at a time when your surviving loved ones are most vulnerable financially. It can also be used as part of your estate planning strategy to reduce inheritance tax bills, provide income for dependents when you die and secure your family’s future.
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Who needs life insurance?
The answer to the question of who needs life insurance is that everyone does. Life insurance is a financial product designed to protect your family from financial hardship in the event of your death. According to the World Health Organization (WHO), in 2015, more than 60% of deaths globally were due to noncommunicable diseases such as cardiovascular diseases and cancers.
In Ghana, over 70% of deaths are due to noncommunicable diseases, according to the Ghana Health Service (GHS). This means that people are dying relatively young, but with a lot of money owed to them by their loved ones.
Life insurance in Ghana is becoming very popular among young Ghanaians because they can get some form of protection against the risk of dying early and leaving behind debt.
Types of Life Insurance in Ghana
When it comes to life insurance in Ghana, you have the option to choose from various types. Some of these include:
Term Life Insurance: This type of life insurance provides coverage for a specified period of time. It is generally preferred by people who do not intend to hold the policy for long or those who believe that they will live beyond their term.
Universal Life Insurance: This type of life insurance is flexible and allows you to make changes to your policy as you please. You can also change your investment allocation, add new beneficiaries and more. The premiums on this type of insurance are generally higher than those charged for term life policies but it offers more flexibility over time.
Whole Life Insurance: Whole life insurance provides coverage for your entire lifetime as long as premiums are paid consistently over time. Some whole life policies even offer death benefits if you die before retirement age, but this feature usually comes at an additional cost.
How does life insurance work in Ghana?
Life insurance is a contract between an insurer and the insured to pay a sum of money to the beneficiaries upon the death of the insured. The insured may be either individuals or businesses. A life insurance policy is a contract between you, the policyholder, and an insurance company.
The policyholder pays premiums over a period of time and when they die, the insurer shall pay out a sum of money to whoever they have nominated as beneficiaries.
Life insurance in Ghana is regulated by the Insurance Regulatory Authority (IRA). All insurers must have their license renewed every three years. This ensures that all policies sold are valid and in line with government regulations.
Who are the top life insurance companies in Ghana?
There are many life insurance companies in Ghana. Some of the top ones include:
AIG Ghana Limited: AIG is a multinational company with a presence in over 130 countries. It was established in 1919 and has been operating in Ghana since 2016. The company offers life and non-life insurance products to its customers.
Prudential Assurance Company Limited: This is one of the oldest companies operating in Ghana today. It was established in 1963 and is currently owned by Prudential plc, which is a UK-based company listed on the London Stock Exchange (LSE). PCL provides both life and medical insurance products to its customers.
Aviva Life Insurance Company (GH) Limited: Aviva originated from the UK where it was established way back in 1696 as an investment company for retired members of the clergy. The company expanded into other areas such as general insurance, life assurance and now offers endowments and pensions too!
