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Wednesday, 26 November 2014

Saving for the future

It seems like it has become impossible to save any money for the future these days. But nothing in this world is impossible, so there are many ways to cut down on expenditure and save for what’s coming ahead. The best way to make sure you don’t spend the extra money is too put it away in a savings account.

Banks offer saving accounts but there are also many insurance companies that offers life savings plan.  Mansard, which is an insurance company offers life savings plan that is specially designed to offer you a combination of superior returns on your medium/long term savings and a FREE Life Insurance cover.
To be able to save for such plans, you will first need to make little sacrifice on your day to day expenditure. Here are a few simple ways to save extra money:
  • Cut down on internet subscription plans on your smartphones, maybe use free Wi-Fi where available.
  • Review your Cable TV subscription, by going for a lower bouquet could fetch a whopping N100, 000 in savings in a year.
  • Cut down on unnecessary phone calls, try to keep it business related or urgent.
  • Spending your holiday in Nigeria can save you a huge load of travelling expenses.
  • Cut down on eating out, home cooked meal is always better.
  • Think about cutting down on cigarettes if you are a smoker. Ten cigarettes a day equates to 3650 sticks or 183 packets in one year. This will set you back around N73, 000.
  • Cut down on your drinking intake, alcohol is also quite pricey. Aside from being bad for your health, they are bad for your pocket.
  • Cut down on buying unnecessary clothes for family events or social gatherings. Every year, hundreds of thousands of Naira are spent on social gatherings.
  • Use the dry cleaners for only your essential or delicate clothes and use the services of the local "Washerman" for the rest of your clothing.
  • Lastly Energy consumption – try to run generators for fewer hours by doing this you could be saving a lot. Nigerians currently spend N796 billion annually to fuel their generators.

Thursday, 20 November 2014

The Benefits of Having a Critical Illness Insurance Cover

The incidence of Nigerians having serious terminal illnesses like cancer or heart attack has been on the increase in recent years. These illnesses are no longer deemed ‘old age’ illnesses as they are now affecting younger individuals.

In today’s world, the odds of surviving a critical illness are great thanks to the advances in medicine. The question is will your finances survive?

The treatment of these illnesses can be very expensive and there is also the financial burden this illness may put on a family, especially if the breadwinner is the one affected by the illness.

Critical Illness insurance is designed to ease the financial pressures that may be created by severe or terminal illnesses. You pay a premium and the insurance company will cover the treatment if you become seriously ill or totally disabled as a result of illness.

In the Nigerian market, Critical Illness insurance is typically purchased as an extension to a life insurance policy. The concept behind this is to make adequate finances available to the afflicted policyholder for treatment should a critical illness occur rather than wait until after the demise of the individual before the full sum assured is paid to the dependants.

1.0. Critical Illnesses Insured on this Policy
The range of diseases covered under this policy differs from one insurance company to another. However, most insurance companies that offer Critical Illness insurance will provide cover for the following illnesses:
•    Cancer
•    Heart attack
•    Stroke
•    Paralysis
•    Kidney failure
•    Coma.

Definition of Terminal Illnesses
1.1. Cancer
A cancer is a malignant tumour or growth caused when cells multiply uncontrollably, destroying healthy tissue. The term ‘malignant tumour’ includes leukaemia, carcinomas, lymphomas and sarcomas. Cancer can affect very many different parts of the body with varying levels of effects; examples of known cancers are that of the blood, skin, muscles and internal body organs.

Symptoms of cancer will vary depending on what part of the body is afflicted. Some general signs and symptoms associated with cancer include:
•    Fatigue;
•    Weight changes, including unintended loss or gain;
•    Skin changes, sores that won’t heal, or changes to existing moles;
•    Changes in bowel or bladder habits;
•    Persistent cough;
•    Difficulty swallowing;
•    Persistent indigestion or discomfort after eating;
•    Persistent unexplained muscle or joint pain.

Treatment for cancer will depend on the type and the body part affected and includes various options, such as surgery, chemotherapy and radiotherapy.

1.2. Heart Attack
This is the death of the heart muscle due to the loss of blood supply. The loss of blood supply is usually caused by a complete blockage of a coronary artery (one of the arteries that supplies blood to the heart muscle). Atherosclerosis is the major cause of this blockage and may result from high cholesterol levels.

A heart attack can occur any time — at work or play, while you’re resting, or while you’re in motion. Some heart attacks strike suddenly, but many people who experience a heart attack have warning signs and symptoms hours, days or weeks in advance. These symptoms include:
•    Chest pain which increases over several days;
•    Pain extending from your chest to your shoulder, down your arm and probably up your jaw;
•    Heartburn;
•    Excessive sweating;
•    Dizziness;
•    Fainting spells;
•    Unexplained fatigue;
•    Nausea and vomiting;
•    An impending sense of doom.

Low dose aspirin is usually prescribed by doctors to persons who are at risk of having a heart attack. Aspirin thins out the blood, helping to reduce the pressure in the heart, thus reducing the risk of blockage.

Treatment for a heart attack varies depending on the situation from medication to invasive surgical procedures, which may be from as much as full open heart surgery.

1.3. Stroke
A stroke occurs when the blood flow to your brain is interrupted, depriving the brain of oxygen and nutrients. This may result from a blockage or rupture of a blood vessel in the brain resulting in:
  •  A loss of consciousness;
  • A partial loss of movement;
  • Or a loss of speech;
  • Or permanent neurological (brain) damage.
The technical name for a stroke is a Cerebrovascular accident (CVA). Causes of a stroke include hypertension, diabetes and brain tumours or aneurysms.
Symptoms of a stroke are:
•    Difficulty in talking, slurred speech;
•    Difficulty in walking;
•    Severe headaches;
•    Paralysis to a part of the face or half of the body;
•    Blurred vision.

Treatment is usually with medication and sometimes surgery may be necessary as well. Sign up for a critical illness cover here

Nigerian Insurance industry

Nigerian Insurance industry

With only 0.5% insurance penetration, Nigeria is in the early stage with insurance and is a potential hub for expanding into West Africa. According to a 2012 report by Enhancing Financial Inclusion & Access (EFInA), there are about 1.3 million Nigerians that have insurance cover. Motor insurance is the cover taken out the most, while life assurance, medical, critical illness cover and livestock/agriculture insurance have extremely low uptake.

Nigeria has a population of about 166 million people with 59 insurance companies, while South Africa with a population of about 52 million has 184 insurance companies; and Ghana with a population of about 25 million has 47 insurance companies.

As well as in-funding which will a play major role in taking up larger ticket risks particularly in the oil and gas sector, energy and aviation sectors, the recent reforms in the insurance sector created significant opportunities in terms of market induced consolidation for greater risk retention capability and an upgrade in technical capacity.

Out of Nigeria’s 59 insurance companies, 24 of them are currently listed on the Nigerian stock exchange. The industry has two main types of income, investment and technical income, it contributes a mere 0.56% to GDP, but the growth rate of the industry premium is estimated at about 18% per year. There have been some mergers and acquisitions, including Crusader Insurance merged with Custodian & Allied Insurance, and Assurance African Holdings acquired GT Assurance, now Mansard Insurance.

Compared to advanced economies, the total insurance premium as a percentage of GDP for US is 14.5%, UK, 15%, Ireland 22% and Germany 8.9%. With a young and growing population coupled with technological advancement and stable economic growth projected at about 6.2%, there is no doubt that opportunities abound in the Nigerian insurance industry. The industry needs a push to implement good corporate governance and for the government to implement favourable policies with respect to automotive policy, oil and gas as well as the housing sector.

Wednesday, 19 November 2014

Mortgage Life Insurance Explained

Mortgage Life Insurance Explained
With more and more of us getting on the property ladder it is vital we think about the future and what will happen to the mortgage if we were to unexpected die. In some countries like the UK it is mandatory that a mortgage holder takes out a life policy to cover the mortgage amount in the event of the policy holder’s death.

Mortgage Life Insurance is different from general Life Insurance. Mortgage Life Insurance covers your mortgage, not your life or any other debt.  There are two types of Mortgage Life Insurance; decreasing term mortgage life insurance and level term mortgage life insurance.

Decreasing term mortgage life insurance
This type of policy covers a reducing sum. As you pay off your mortgage, your remaining balance decreases. The policy will pay out the remaining balance of your mortgage should the worse happen to you.

This type of policy is only really appropriate for people with repayment mortgages, who gradually pay off their mortgage capital over time.

Level term mortgage life insurance
This type of policy covers a fix amount, so if you were to protect $150,000 no matter when a claim is made the policy will pay out $150,000. So, even if you only owe $100,000 on the mortgage, your policy will pay you an additional $50,000. This policy type is ideal if you want to leave your loved ones a little extra on top of covering the mortgage.

How mortgage protection insurance premium is calculated

When working out what premiums to charge, insurers will look at the likelihood of the insured dying during the policy term. The sort of things they will take into consideration include
  •  Age
  • Sex
  • Health
  • Occupation
  • Weight
Compare insurance policies
Like with any other type of insurance make sure you read the small print to ensure the policy best suits your needs. Remember, cheapest is not always the best.

Thursday, 13 November 2014

Consequential Loss Explained

Consequential Loss Explained

When setting up a new business or office there are many legal and financial implications that need to be taken care of. Insurance policies such as employer liability, contents and building insurance may seem the obvious ones. All businesses should protect themselves with consequential loss insurance too.

What is consequential loss insurance?

Consequential loss protects a business against loss of productive capacity or future earning power which may occur as a result of loss or damage to the premises and property insured under the Fire/Extraneous Perils.

In simple terms consequential loss insurance protects a business from the drop off or halt in business caused by damages that prevent the continuation of normal business.

Will premises insurance not cover any consequential loss?

Unfortunately property insurance does not cover the loss caused indirectly by the peril. So, although the property insurer may rebuild the property they will not pay for the loss incurred while the business was not operating.

How to buy consequential loss protection

Consequential loss insurance is not as widely available or as easily accessible as traditional insurance products. It is best to approach a specialist commercial insurer who can advise on the best level of cover for a business.

Mansard Insurance offer a very affordable and flexible consequential loss insurance product, please contact them for a quote or more information. 

Tuesday, 11 November 2014

What are the benefits of goods in transit insurance for my business in Nigeria?

This week, we will continue from where we stopped last week on Goods-in-Transit Insurance
3.0 Rating Considerations
The following factors are considered in determining the rate and terms under which Goods-in-Transit risk will be accepted.

3.1 Scope of cover: The choice of cover (either all-risks or restricted cover) and the type of policy arranged (either single transit or declaration basis) are considered in determining the pricing of the risk.

3.2 Estimated Annual Carriage (limit per carriage): The EAC is a clear indication of the size of the risk exposure to an insurance company on a policy. When a policy is arranged on a declaration basis, insurers will want to know the limit per carriage.

3.3 Nature of cargo: The nature of cargo being transported is very important; some cargoes are more prone to damage and pilferage than others whilst some require special transportation conditions.

3.4 Mode of packaging: The same type of cargo could be transported in different ways and each way presents different risks to the insurance company. The insurer will consider the expertise of the particular insured in the haulage business in taking a decision on the terms of risk acceptance.

3.5 Owned or hired vehicles: The means of transportation is a major consideration in determining the terms for a goods-in-transit policy. The insurer will ask questions about the ownership of vehicles, the conditions of the vehicle(s) earmarked for transportation of the goods and the length of the journey. If the mode of transportation is by rail, details of the trip, including the terminals where the train will stop in the course of the journey, is the type of information that will be of interest to the insurer.

3.6 Insured’s loss experience: Obtaining loss history of a given insured will assist in assessing the customer’s risk. An insured with a bad loss experience will either pay a higher premium or be ready to abide by the insurer’s terms.

4.0 Policy Exclusions
A Goods-in-Transit policy does not cover certain risks, and these risks can broadly be categorized as: those that are better covered under some other optional insurance, those excluded because of their particular nature and those arising from the insured’s negligent act or omission. Some of these exclusions are as follows:

1.    Loss arising from ordinary leakage, ordinary loss in weight or volume or inherent vice of the goods;
2.    Loss or damage resulting from theft or pilferage assisted by or in connivance with the insured’s employees;
3.    Loss or damage and any consequence whatsoever resulting from or in connection with war, riot, strike civil commotion or earthquake; terrorism is also not covered;
4.    Loss or damage caused by moth, vermin, insects, damp, rust and gradual deterioration;
5.    Loss or damage arising from the carriage of explosives;
6.    Loss arising from leaving unattended the conveying vehicles containing the property;
7.    Carriage of bullion cash, banknotes, bonds, deeds, bills of exchange, promissory notes, treasury notes, stamps and documents of title of property, jewelry etc.;
8.    Delay, loss of market or consequential loss of any description;
9.    Mechanical, electrical or electronic breakdown or malfunction where there is no external evidence that an insured event has occurred;
10.    The absence, shortage or withholding of labour of any description resulting from any strike, lockout, labour disturbance, riot or civil commotion;
11.    Expropriation, which means the lawful seizure, confiscation, nationalization or requisition of goods;
12.    Excess, which is usually found in most insurance policies and is defined as the first amount of each and every claim that is borne solely by the insured. This amount is always stated in the policy.

Note that some of these exclusions can be covered by more specific policies. For example, theft or pilferage assisted by or in connivance with the insured’s employees is better covered by a fidelity guarantee policy, while carriage of bullion, cash, banknotes, bonds, bills, etc. is better covered by a money insurance policy.

5.0 Conclusion
The insured usually determines the extent of the risk exposure required to be covered by the insurance company. Some customers might want to retain risks they believe are unlikely to crystallize. However, taking the goods-in-transit policy remains the best cover for risks inherent in the movement of goods from one location to another whether they are own goods or being carried for a fee.

Thursday, 6 November 2014

Do I Need Retirement Planning?

With the global financial crisis and no social security in Nigeria, it is really important that individuals plan their retirement to ensure a comfortable life after they retire. Retirement isn't a word everyone thinks of until they are a few years or months away from retirement. For some it’s just another plan that comes with their jobs, for others it’s their future living. 

Retirement is all about thinking ahead, seeing the inevitable future and being prepared for whatever challenge you come across. The first and most important question you need to ask yourself is ‘what do I do after I retire?’ The best way to get your answer is some quiet time to look into the future.

Think about how you want to spend the rest of your life, busy and active or relaxed and living the simple pleasures of life or a combination of the two. Find what will really make you happy and base your retirement plan according to that. Many people choose to fulfil their dreams, whether it be to become a cook or grow their own fruit and veg, while others choose to travel the world and see new things.

Your employment retirement plan is an important part of your future financial security, so it is just as important to understand how it works and what you will receive. There are two main types of plans:
  • Defined benefit - a specific monthly benefit at retirement funded by the employer
  • Defined contribution – a non-specific benefit amount at retirement funded by you and/or your employer
Make sure you find out which kind of plan your employer has and start planning for your future. As long as you figure out what you want in life, then you already have a good retirement plan.