Can Insurance Make you Rich?

• November 24, 2018
• LUTAKOME
• no comments

Janet (not her real name) was promised by an insurance salesperson that if she subscribed
for a life insurance plan with a monthly premium of 100k she will get up to 10 million after
just five years. She signs up gets a contract which she doesn’t bother to read and waits to
cash in after paying her premium religiously.

At the end of 5 years Janet finds out that the 10 million promised during the sales process is
the amount payable should she lose her life during the 5 year period and that the contract
doesn’t commit in absolute terms the amount payable after 5 years.
Janet’s story is shared by a number of Ugandans who have bought life insurance in the
recent past

Generally, the essence of insurance as a financial tool is one which safeguards a subscriber
from going back to zero if something unanticipated happens, generally, insurance attempts to
restore your financial position prior to the loss

As the insurance industry grows, there is an increase in a number of life insurance
companies who have done a great job in recruiting and training sales advisors who are
deployed every day to reach out to prospective customers with a promise of a better future.
However, the role of life insurance on one’s financial future is more of financial security than
investment return; the problem arises when the prospective clients are compelled to base
their decision majorly on the intended return on investment after the policy has reached
maturity. Much as this is important, it should not be the major basis of taking out life
insurance cover.

Once someone buys a life insurance policy, the major focus should be on the peace of mind
you get that for a period of cover you have chosen, you have no worry that if you lose your
life or ability to work through incapacity your child(ren) will be kept in school to achieve the
dream you planned for them. Whatever is paid at the end of the period as a maturity value
whether some misfortune has befallen you or not is a bonus but not the main purpose.
In conclusion, insurance doesn’t make anyone rich but serves to preserve your already
existing legacy through creating a buffer to push you through difficult times which are not
anticipated

Once you sign up for an insurance policy, ensure that you read the insurance contract within
the first 30 days of receipt and seek clarity from the insurance provider, because when you
delay the results can be costly.