Make group life insurance compulsory — Insurers association
The country’s insurance industry is pushing for the concretisation of some provisions in insurance laws for companies to take a compulsory insurance cover for employees who die on the job or become unable to work due to critical illnesses or permanent disability resulting from accidents to receive compensation.
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Although Workmen’s Compensation which has been embodied in comprehensive Group Life Insurance cover is operational in the country, an important aspect – paying compensation to workers who become critically ill and cannot continue to work – is not typically patronised by corporate Ghana.
The Ghana Insurers
Association (GIA) is, Association (GIA) is therefore, pushing for the inclusion of Group Life Policy for all government/public sector workers, as well as making it compulsory for corporate bodies to buy a comprehensive Group Life Insurance policy for employee compensation for death in service or disability while working.
Currently, the Workmen’s Compensation Act 1987 (PNDCL 187), Section 1, places an obligation on corporate bodies to pay compensation to employees who become critically ill or die either through accidents or natural causes, but allows corporates to decide on the mode of compensation. By this, companies can either set aside funds for the payment of such compensations themselves or transfer the risk to an insurance company; this has brought about various group life policies.
Though most multinationals and big enterprises already subscribe to the Group Life Insurance policies, these are still a good number yet to do so, since it is not compulsory.
On the other hand, the government, which is the largest employer, does not take such a policy for its workers and the insurance industry believes it is time the country’s laws were amended to compel the government to take such a cover for public sector workers.
“Currently, while employees enjoy pensions, their beneficiaries do not receive anything in the event of dying in service. This provision will be akin to what working persons receive when they go on pension,” the President of the Ghana Insurers Association (GIA), Mr Ivan Avereyireh, told the GRAPHIC BUSINESS in Accra after opening a two-day insurance course for financial journalists in Accra at the Ghana Insurance College.
But the GIA is pushing for a compulsory option for insurance, without recourse to the other option of the employer keeping its own fund for that purpose.
Death in service
Predominantly, Group Life insurances signed on by employers cover only death and certain critical illnesses such as stroke and heart attacks.
But the Group Life policy can also cover ‘Death Only’ or ‘Death with Critical Illness’ and ‘Death with Personal Accidents.’ These mean if a worker dies whether at home or the workplace due to accident or natural causes, an agreed amount of money at policy inception would be paid to their next of kin.
On the other hand, however, if a worker survives a heart attack or stroke but can no longer work, Group Life Insurance would cover such incidents by way of terminal financial support.
The GIA, supported by the insurance industry regulator, the National Insurance Commission (NIC), wants the bone of contention addressed to forestall the unfortunate situation where people who do not live until retirement to enjoy their pension can still live a normal life, even if they cannot function again at the workplace.
“When this is instituted, workers will be assured that whether they die in service or retire they have something from the employer. This can boost productivity; workers will be so loyal and will work as hard as possible because they know they are covered on all fronts,” the president of the insurers association pointed out.