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Health insurance key enabler of wealth—Experts

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1 year ago

Experts have said that having basic knowledge of health insurance would help transform lives as it is a key enabler of wealth.

They submitted that the understanding by ordinary Nigerians of the workings of health insurance as a key enabler of wealth could substantially improve the country’s general health, as many citizens would free themselves from the shackles of dependency and debt.

These views were expressed at a live webinar hosted by Coronation Life Assurance, where they discussed the critical role of health insurance in transforming Nigeria’s economy by building more resilient lives.

Some of the discussants were, Assistant Director of Underwriting and Marketing at Africa Re, Abdul-Rasheed Akolade; Founder and Managing Director of Tillit MSME Microservices, Dr Yomi Sule; Nollywood actor and producer, professional banker and financial advisor, Adekanla Desalu, aka ‘Deza the Great‘, and Head of Partnership at Coronation Life Assurance Limited, Kehinde Grillo. The panel was moderated by Wole Famurewa, CNBC Africa Anchor.

Executive Director of Coronation Life Assurance Limited Adebowole Adesona, set the tone of the discussion, pointing out the critical role of prevention in managing health costs and outcomes, and noted that the key to prevention is education.

Keynote speaker, Akolade described health insurance as a key enabler of wealth, stressing that health insurance covering named illnesses, injuries, or conditions provide funds for the treatment or management of conditions that might otherwise destroy a person financially.

He said even where people are able to make plans to carter for illnesses as they arose, over a lifetime, money spent on managing such ill health could have been better invested elsewhere, such as in education, homes, building businesses, or saving for retirement, and submitted that critical illness insurance is a powerful tool for preserving and building wealth.

According to him, critical illness cover is effective in managing large, ongoing, and expensive treatments that most people struggle to afford such as dread diseases like heart attack, stroke, cancer, coronary bypass, major organ transplants, or kidney failure.

Similarly, he pointed out that permanent health insurance, or PHI, was a fantastic tool, and that ensuring that disability did not wipe out one’s income or render people dependent on their employers, relatives, or friends, PHI made provision for the payment of an agreed income in the event of permanent disability through accident, ill-health, or sickness.

He highlighted the dire need for education on medical health insurance in Nigeria while opening the discussion to all panelists, including questions from the webinar audience.

Also, participants pointed out that the absence of any formal government-managed health insurance scheme in Nigeria placed an even larger burden on the country’s insurance sector as it sought to develop affordable products to help ordinary people shoulder their healthcare responsibilities.

They observed that in many countries, some sort of official tax, like value-added tax (VAT) on transactions, are used to fund basic public medical aid scheme, stressing that in Ghana, for example, a 2.5 percent VAT funded a basic national health insurance product covering 70 percent of the population.

They noted that his was an ideal situation. With basic healthcare covered by a national scheme, most Ghanaians were free to augment their public health insurance with smaller private covers focused on their particular health or lifestyle risk profiles.

Panelists pointed out that even though Nigeria did not have any national health insurance programme, the private sector provided extremely competitive offerings, and that for as little as N10,000 a year, for example, Nigerians could secure up to N10 million in health insurance.

They stressed that since premiums can generally be paid monthly, bi-monthly, annually, or even in a one-off lump sum, flexibility combined with relatively low premiums make insurance available to most.

According to them, another advantage of health insurance is its impact on improving health outcomes.

They stated that once people purchase a health insurance policy, they usually become more aware of the dietary and lifestyle practices that contribute to improved health and longevity, as healthier behaviour extends the value and impact of their health investment, and in some countries, insurance providers actively incentivise healthy lifestyle practices through premium rebates or rewards.

They highlighted that healthier client population reduces the cost of insurance, lowering premiums for members and allowing health cover to be extended to wider population, while most insurance products do not cover pre-existing conditions and most health policies cannot be purchased beyond the age of 65, stressing that the insurance industry in Nigeria is generally willing to write individual policies for individual circumstances, although it is advisable to purchase health insurance while young or still active service.

“Not only does this help preserve and grow wealth throughout one’s life and ensure better lifestyle choices and health outcomes, but it also enlarges the pool of contributions, enabling the industry to extend cover to more Nigerians. It is also important that Nigerians understand that they can purchase multiple health covers, provided they declare overlapping covers at purchase.

“Should a single individual have a policy ensuring a particular condition up to N10 million, and another separate policy ensuring the same condition up to N20 million, for example, that individual would be able to call on up to N30 million worth of cover in the event of contracting the named condition.

“In a country characterised by relatively short-term thinking, the Nigerian insurance industry is working to democratise the country’s insurance sector through a combination of public education as well as the provision of accessible and affordable products”, the discussants stated.

They added that Nigeria boasts of a broad range of off-the-shelf health insurance and critical illness products that are easily available over the phone, online, or digitally via handheld phones.

Oluwatosin Ajiniran, Head of Claims at Coronation Life Assurance Limited in her closing remarks, emphasised the value of wealth as an asset, stressing that every effort should be made to manage and preserve health as it is the key to wealth.

Ajiniran stated that Nigeria’s insurance sector is leading the charge to deepen financial inclusion in the country, developing products and services designed to build and preserve wealth by equipping the citizens to manage their health in affordable manner.

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