Insurance product designed for low income earners launched

Many Ghanaians, especially, middle and low-income workers do not buy insurance products.

The NIC says the situation where only 4.1 per cent of adults hold insurance of any form other than the National Health Insurance Scheme(Nasho), is a major risk to the entire populace.

The new project, Promoting Micro Insurance in Ghana (ProMiGH), will rally insurance companies to design innovative products tailored for the low-income market. They will also be required to promote the scheme through effective advertisement and advocacy.

According to the NIC, the new product must be developed with the intention of meeting the needs of, and be  marketed and sold to the low-­income sector.

The premiums must also be affordable for low-­income persons, and the contract must be accessible to those persons for whom it was designed and developed.

To make it more accessible, a micro insurance contract must be written in clear and straightforward language, with minimal use of legal and technical language in order to be readily understood by low-income persons.

Launching the product at a meeting with insurance companies, the Commissioner of the NIC, Mrs Nyamikeh Kyiamah, said micro-insurance claims under the new arrangement must be dealt with expeditiously.

“Claims must be determined within seven days of receipt and payments made within 10 days of receipt of the claim,” she said.

She added that it was the best way to shore up confidence in the system as a means of encouraging more people to engage in it.

The project is being undertaken in partnership with GIZ, a German funding agency.

The Head of Cooperation at the Embassy of Germany, Dr Maria Tekuelve, said the project would give low-income households hope in times of disaster to be able to run their businesses and salvage their property.

“The topic today, is about caring for the common woman and common man who suddenly need to cope with an unfortunate event or even shock; natural disasters, accidents or even death of a beloved family member or bread winner,”

Dr Tekuelve said the programme would help find appropriate ways to cope with these kinds of events in Ghana through the provision of simple insurance products in the informal sector.

The NIC says a draft insurance bill currently before Cabinet, which is likely to be passed later this year, would give legal backing to the measures put in place by ProMiGH.

Story by Justice Barcoo and Matilda Matorin