Fierce Ambazonia commander in Guzang, Batibo known as Commander Tiger has been “ASSASSINATED” by General Ivo (VIEW PHOTOS)

The 21st century is a perilous period (full of risks, uncertainties and dangers). Nowadays, the probability of a bad event to occur is high. This explains why life expectancy in South Africa has greatly reduced.

Today there’s so much terrorism in the world,crisis/poverty, racism, hatred, witchcraft, envy, car accidents, natural disasters, epidemics,diseases, and other bad elements (events) that can cause South Africans to suffer financial loss.

Nobody knows what will happen in the next hour or minute.Risk is omnipresent and all pervasive.

Many South Africans are constantly afraid to suffer a loss if something bad unexpectedly happens to them or a family member, friend or relatives.

For example most South African men and women are often lost in deep thoughts due to the following questions….

How will i cope with life if my husband (the bread whiner of the family) dies unexpectedly??? How will i give him a befitting burial???
Where will i run to for help, if my house is completely destroyed by fire???
What will i do if my car is damaged in an accident.
How will i pay the cost of my medical bills if i,m infected with HIV and deadly disease???
The South African Athletes are constantly wondering how they will pay the cost of their surgeries if their leg is injured.
What will i do if my business fails due to crisis and other unforeseen circumstances???
What will i do if my flight is cancelled or delayed???
How will i pay my rent and feed my family if i lose my job???
ETC ETC…. in fact the questions related to uncertainties are unlimited.

The insurance companies in South Africa have come to take away the worries of the South Africans. They have the answers to all the questions related to our uncertainties.

The Insurance companies in South Africa have come to manage our risk and to compensate us when something bad happens to us.

What is Insurance ??– South Africa
Insurance is an arrangement/agreement between an insurance company ( insurer) and an individual (the insured person) wherein the insurer/insurance company promises to provide financial compensation to an insured person upon the happening of a specified event or loss.

In layman’s terms, insurance is an agreement between an individual ( a South African) and an insurance company in which an insurance company promises to pay a certain amount of money to an insured individual if a specified event occurs and the insured person suffers a loss.

For example – the insurer/insurance company may promise to pay the insured person a compensation of R 1 million if the insured person is diagnosed with cancer (event) after 6 months from start of policy (terms).The terms of Insurance are decided between the insurer and insured via an insurance contract.

Insurance can also be defined as a compensation contract (insurance policy) which is sold as a “product” to people who wish to insure their life, health and properties against loss.

An insured person ( AKA insurance policyholder) is an individual who has bought an insurance policy from an insurance company. The money paid by an individual to buy an insurance policy from an insurance company is called a premium (insurance policy premium).

An individual can choose to pay his/her insurance premium in full or in small monthly installments. The insurance contract will only be valid upon completion of payment of the insurance policy premium. Once a premium is paid, the insured individual becomes a policyholder with the insurance company and is eligible to receive financial compensation for an insurable risk.

Summarily, insurance companies works on building products (insurance policies) aimed at providing financial protection from risks. These risks include death of bread earner (life insurance), hospitalization expenses (health insurance), damage to assets (car insurance), flight cancellation (travel insurance).

How does Insurance work in South Africa.

After you have insured your health or property with an insurance company, if you get sick or your insured property is damaged, your insurance company will receive financial compensate for your loss.

For example if you get sick after buying a health insurance policy from an Insurance company A, you will need to pay your medical bills out of your own pocket and then submit your receipts to the insurance company. Your insurance company will reimburse any amount of money you spent to treat yourself.

Be sure to keep all documentation, file any necessary police reports, and save all receipts. Insurance companies don’t reimburse you based on your word.

In a case where your car was damaged in an accident, your insurance company will reimburse the money you spent to repair your car. You just need to submit your receipts to your insurer and your insurer will reimburse you.

Types of Insurance companies in South Africa

The insurance company’s role includes –

A) ASSESSING A POTENTIAL CLIENT TO DETERMINE IF HE OR SHE HAS AN INSURABLE INTEREST OR IF A RISK /LOSS IS INSURABLE.

A basic requirement for all types of insurance is that, the person who buys an insurance policy must have an insurable interest in the subject of the insurance. A person has an insurable interest in something when loss or damage to it would cause that person to suffer a financial loss or certain other kinds of losses. In simple language, insurable interest exist if the party purchasing an insurance policy would genuinely suffer economic loss if the person or item insured were to die or damaged, destroyed, lost or cause damage to another person or object.

The insurance agents will also assess if a risk is insurable before selling an insurance policy to a potential client.

An insurable risk/loss is one that is accidental, unforeseen, definite in time and place and its measurable in dollars and cents. Insurance companies will not insure something guaranteed to happen. There has to be element of accidental happening.

B) DETERMINING THE COVERAGE I.E. PRICING OF THE INSURANCE POLICY.

Insurance underwriting is arguably the most important role of an insurance company. The insurance underwriters of the insurance companies carefully evaluate the risk and exposures of potential clients. They decide how much coverage the client should receive, how much they should pay for it, or whether to even accept the risk and insure them. Insurance underwriters also ensure that the cost of an insurance policy (premium) is proportionate to the risks faced by the individual concerned.

When choosing an insurance policy, buy an insurance policy which suits your specific needs irrespective of its price.

Most companies also offer different levels of cover, e.g. basic, standard, comprehensive and ‘prestige’. Each level has a different limit on the total annual medical costs, the minimum usually being R2 million/€206,500(although you’re recommended to have much more cover, many companies provide cover of up to R7.5 million/€774,385), and some companies limit the charges for specific treatment or care such as specialists’ fees, operations and hospital accommodation.

Some insurance covers only a percentage (e.g. 80 per cent) of claims and you must pay the balance yourself (in effect an excess or deductible), for which you pay a lower premium than for 100 per cent coverage.

C) INKING THE INSURANCE CONTRACT

Insurance contracts contains policies which stipulates the condition in which an insured person is eligible to receive compensation for a loss.

For example an insurance company may state that an insurance policyholder will only be indemnified if the cause of loss (called a peril) results from a cause of loss identified in an insurance contract.

Most insurance companies often write airtight contracts (eliminating any loophole) which might be used by dishonest people to take advantage of their business.

Insurance contracts also states the validity period of a cover.Policies often have a period (e.g. five years) during which the insurance company cannot exclude you from cover, even if you have a serious illness costing the insurance company a lot of money.

Before purchasing an insurance policy, read the terms of the insurance contract to ensure that it suits your specific needs. When it comes to insurance policies, there’s no one size fits all.

For example, when deciding on the type and extent of health insurance, make sure that it covers all your family’s present and future health requirements in South Africa before you receive a large bill. A health insurance policy should cover you for all essential health care, whatever the reason, including accidents (e.g. sports accidents) and injuries, whether they occur in your home, at your place of work or while travelling. Don’t take anything for granted.

You should avoid a company that reserves the right to cancel a policy unilaterally when you have a serious illness or when you reach a certain age (maximum insurable age), as it will prove difficult or impossible to find alternative cover. You should also steer clear of a one-year contract, which a company can refuse to renew. Policies often have a period (e.g. five years) during which the insurance company cannot exclude you from cover, even if you have a serious illness costing the insurance company a lot of money.

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