Government has been advised to take a minimum life insurance policy for all its employees as a means of lending support to the life insurance companies to thrive.
Mr Edmund Diamond Addo, General Manager of Donewell Life Company Limited (DLCL), who gave the advice, added that the Government could enact an insurance law to authorize all employers in both the private and the public sectors to effect a life insurance scheme for workers.
He was speaking to the Ghana News Agency in an interview in Accra on Thursday.
Mr. Addo made reference to the new Insurance Act 2006 (Act 724), which makes it compulsory for owners and occupiers of public and commercial buildings to insure them, stressing that Government could enact a similar law that would require employers to take a life insurance policy to cover their employees while they are in active service.
He explained that the cost to the employer would be an annual renewable premium.
Mr Addo said he was optimistic the move would ensure that families and or dependants of employees, who die in service would receive additional funds apart from the regular pension benefits the deceased would be entitled to.
He said dependants or bereaved families of younger workers, who died in active service would most, especially benefit financially from the new proposed insurance law than they would have under the current condition.
Mr Addo added that “the life insurance benefit would serve as an add-on to any existing pension benefits.”
He suggested that Government could in addition to the enactment of a compulsory life insurance cover for employees in both the private and public sectors, take steps to promote the mortgage industry which was also an avenue for life insurance business.
Mr Addo said, “when people go in for mortgage loans, life insurance protection (i.e. a mortgage protection policy) becomes a requirement before the loan is disbursed. This will make the life insurance companies to thrive and the economy to boom”.
Speaking on DLCL’s business outlook for the 2013, he said, the company has targeted to grow its premium income by about 35 per cent from an estimate of GH¢7.6 million for the year ending 2012.
Mr Addo said in 2011, the company realized GH¢7.2 million in premium earnings.
He expressed optimism that the goal would be achieved through implementation of effective and comprehensive strategic activities.
Mr Addo said the company would pursue group life businesses, increase its funeral insurance portfolio, introduce a new distribution channel by way of bancassurance and roll out a new child education policy, which would be different from the current one which was tilted towards savings.
“Management intends to achieve all these with a minimal cost”, he added.
He said management intends to use a new sales structure that is agency-driven, explaining that the agency force would be revamped to serve as the vehicle to carry out the company’s businesses.