No honest conversation about personal finances can end without the mention of the importance of insurance. If we are going to talk about insurance we owe it to ourselves to get it right. There are a lot of insurance products out there and while insurers will speak to us about in marketing talk we should strive to understand what these various insurance products offered by insurers really mean for us. Let’s look at the types of insurance that you can get in Zimbabwe. The Zimbabwean insurance landscape is large so it is not possible to cover specific products available in Zimbabwe fairly. What you will get here is an understanding of the type of insurance and you can contact insurance companies or brokers to get information of the products through which the insurance is offered and the terms and conditions.
Life assurance
Life assurance plans provide a payment when the insured person dies. Assurance because it is a certainty as opposed to insurance which is for possibilities. Your options when it comes to life assurance are plenty and the field has diversified products that are niche such as accidental death assurance that pays out in the event of untimely passing by accident. Whichever the case life assurance products have a simple working structure; you pay a defined amount per month to receive a defined payout when the assured event occurs. The payments run continuously, it is a life contract.
Funeral assurance
More commonly known as a burial plan this insurance product covers costs associated with funerals. The costs associated with burying a person after they have passed must be quite hefty. Leaving this burden to other people in this day and age should be avoided as soon as possible. These policies have become quite dynamic and have come to include more than just basic costs. Repatriation, transport, catering and even generators are included in some of the plans you will see out there.
Health insurance/ Medical aid
Health insurance which we otherwise know as medical aid covers medical expenses. This is a difficult one to convince many people of because there is a belief that medical aid is for people who have known conditions or regularly experience sickness. Insurance by design is meant to guarantee a result. In the case of medical aid, the result we are trying to guarantee is that a medical emergency will not floor your personal finances. Knowing our economy the chances of this happening without medical aid are very high. Medical aid has also taken a lot of battering in Zimbabwe as a product with many people experiencing increasing premiums with decreasing service or complete declines in service.
Accident insurance
Accident insurance isn’t the most popular thing out there but it is useful to have. There are many different types of accident insurance plans we will get to but in essence accident, insurance covers you if you are involved in some sort of accident that causes injury to yourself or others. The definition of accident is important as many will go as far as defining it as an event external to you, which in English means that you did not cause the accident. These plans are useful and because of the low likelihood, they have very low premiums. They are usually add ons to other policies.
Sickness
This is a type of insurance that has experienced somewhat of a surge. The appropriate term is a hospital cash plan or some variant of that. The aim of the plan is simple, it provides cash to you while you are hospitalised. It does not pay for medical expenses outright but gives you cash that you can choose what to do with. So it can be adapted to income replacement (which we will speak about shortly) or the dreaded medical aid shortfall which we have been forced to become accustomed to. They will normally have a flat amount of cash that is paid out to you if you are hospitalised up to a limit of 14 days at a time and usually a certain number of days per year like 30.
Income replacement
Income replacement has been with us for quite some time. Like the hospital cash plan, it pays out an agreed sum of money in the event of a loss of your source of income. My last tangle with an income replacement plan in Zimbabwe offered to pay 80% of your normal income while you were unemployed. If you want to talk about insurance guaranteeing a result this is the epitome of it.
Casualty insurance
Casualty insurance takes many different shapes and forms but it is essentially insurance that covers you for the harm you may cause to others. Not quite your personal finance insurance but we all make mistakes from time to time and a casualty insurance plan make sure that you don’t end up paying heftily for your mistakes.
To find out the specific products available contact your insurance company or your insurance broker for detailed information. When dealing with insurance the devil is in the details so make sure you understand what you are getting yourself into.
