Why you need health insurance for critical illness

Taking out insurance for critical health conditions have been identified as key in improving general health and freeing oneself from the shackles of dependency and debt.

Experts who spoke in a recent live webinar hosted by Coronation Life Assurance pointed out the critical role of prevention in managing health costs and outcomes.

According to them, lack of knowledge was the biggest challenge many Nigerians face, since N10 million critical illness cover could actually be secured with as-low-as N10, 000.00 premium.

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Abdul-Rasheed Akolade, assistant director of Underwriting and Marketing at Africa Reinsurance corporation who was the keynote speaker described health insurance as a key enabler of wealth. Health insurance covering named illnesses, injuries, or conditions provided funds for the treatment or management of conditions that might otherwise destroy a person financially.

Even where people were able to make a plan to deal with illnesses as they arose, over a lifetime, money spent on managing ill health was money that could be better be invested elsewhere, such as in education, housing, building businesses, or saving for retirement, Akolade said.

Akolade believed that critical illness insurance was a powerful tool for preserving and building wealth. “Covering named dread diseases, such as heart attack, stroke, cancer, coronary bypass, major organ transplants, or kidney failure, critical illness cover was effective in managing large, ongoing, and expensive treatments that most people would struggle to afford.”

“Similarly, permanent health insurance, or PHI, was a fantastic tool. Ensuring that disability didn’t wipe out one’s income or render people dependent on their employers, relatives, or friends, was possible with PHI as it makes provision for the payment of an agreed income in the event of permanent disability through accident, ill-health, or sickness.”

Other discussants at the event includs Yomi Sule, founder and MD of Tillit MSME Microservices; Adekanla Desalu, aka ‘Deza the Great’, nollywood actor and producer, professional banker and financial advisor; and Kehinde Grillo, head of Partnership at Coronation Life Assurance Ltd., discussed the critical role of health insurance in transforming Nigeria’s economy by building more resilient lives. Wole Famurewa, CNBC Africa Anchor, moderated the panel and Adebowole Adesona, executive director of Coronation Life Assurance Ltd set the tone of the discussion.

Opening the discussion to all panelists, including questions from the webinar audience, highlighted the dire need for education on medical health insurance in Nigeria. Participants also 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.

That said, panelists were at pains to point out that even though Nigeria did not have any national health insurance programme, the private sector provided extremely competitive offerings. For as little as N 10,000 a year, for example, Nigerians could secure up to N10 million in health insurance.

Since premiums can generally be paid monthly, bi-monthly, annually, or even in a once-off lump sum, flexibility combined with relatively low premiums makes insurance available to most.

Another advantage of health insurance is its impact on improving health outcomes. 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. In some countries, insurance providers actively incentivize healthy lifestyle practices through premium rebates or rewards. Healthier client populations reduce the cost of insurance, lowering premiums for members and allowing health cover to be extended to wider populations.

While most insurance products don’t cover pre-existing conditions and most health policies cannot be purchased beyond the age of 65, the insurance industry in Nigeria is generally willing to write individual policies for individual circumstances, the experts said.

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“it is advisable to purchase health insurance while young or still an active professional. 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.”