The importance of having financial safety nets in place to deal with unexpected adversities cannot be overstated. This is especially true when it comes to managing unforeseen emergencies such as accidents or dealing with the burden of sudden medical costs.
In light of this, the findings from the 2023 Old Mutual Financial Services Monitor report are cause for concern, as they highlight a significant lack of insurance coverage among employed Ghanaians.
The report reveals that approximately 9 out of every 10 individuals surveyed in Ghana do not have life insurance coverage, with both men and women facing the absence of such financial protection. This poses a significant risk, as lacking life insurance can exacerbate the financial strain during times of urgent need.
Even more concerning is the fact that 24% of Ghanaians are yet to fully embrace the concept of insurance, with 18% not perceiving life insurance as important.
Limited awareness about insurance principles, misconceptions about age prerequisites for insurance, and inadequate knowledge about insurance providers in Ghana are some of the factors contributing to this low acceptance rate.
Another key highlight from the survey is that a notable 73% of the individuals included are employed in the private sector, with only 27% in the public sector.
This underscores the substantial proportion of informal sector workers who lack life insurance coverage. The graphs below visually represent the reasons for the lack of life insurance covers in Ghana.
One of the most worrying aspects of this report is the comparison with the UN Development Program’s 2022 report, which indicated that 70% of Ghanaians had life insurance cover in 2021.
This suggests a notable surge of 18% in the low acceptance rate of life insurance in Ghana between 2021 and 2023, as indicated in the Old Mutual survey. This places Ghana far behind the United States, where 75% of Americans hold insurance coverage, underscoring the urgent need for Ghanaians to prioritize securing life insurance coverage.
As such, it is imperative for both the government and private sector organizations to prioritize education and awareness initiatives to equip Ghanaians with the knowledge and understanding of the importance of life insurance.
Additionally, the insurance industry should explore innovative and flexible solutions to address the perceived expense of insurance and the other concerns outlined in the report.
