Challenges of life insurance

Life Insurance can be defined as a legally binding contract between an insurance policy holder
and an insurance company, where the insurer promises to pay a sum of money to beneficiaries
stated in the contract in exchange for a set premium, upon the death of an insured person or after
a set period. Life insurance provides financial support to preserve your way of life, or that of
your family, in the event of an accident, serious illness or even death.

Some challenges facing the life insurance are,

Complexities of Life Insurance contracts. Life insurance contracts are sometimes too
complicated for someone with no insurance knowledge to understand. I think this is a challenge,
premiums to be paid, policy term a policy holder will be covered for, coverage amount,
exclusions if added may eventually make the contract too complex it may be worth nothing. For
instance, some policies may excluded coverage for death caused by performing high-risk
activities when maybe the policyholder was not prompted when he agreed to this contract due to
his illiteracy in insurance industry. Insurance companies should make sure every detail of a
contract is understood by the policy holder before he endorses to prevent a dispute if the insurer
should breach the contract. This initiative will help both parties in the long term.

Delays in claim process: Delay in claim process simply refers to certain scenarios where a
combination of factors cause payment of claim to take longer than expected. These delays could
be caused by insured, insurer or a third party. Lack of information is mostly the main cause in
our opinion. Because we are not as advanced in technology as the western world we rely on the
old school (hardcopy) way to keep records. Retrieving information takes a while unlike in the
western world where all it takes is a click of a button. This naturally causes delays in claim
processing. Insurance Companies must adopt effective measures to avoid or reduce such delays
to ensure a satisfactory claim payment process.

High Cost of Premiums, the high cost of premiums remains a crucial concern for individuals
and policymakers alike. Life Insurance policyholders arguably pay more premiums than non-life
insurance holders. This may prove to be a challenge for the average Ghanaian who has
dependents to will opt not to buy life insurance as it may prove to be a long term investment.

Another Issue of life insurance is uncertainty of payout: There is no certainty beneficiaries will
be paid in the event of your passing. Uncertainty may be raised as a result of exclusions and
limitations that may have been inserted into the policy by the insurer. Once you die, the insurer
may point these out to your beneficiaries as a reason to not make payments
Lack of trust: This explains why many people choose not to purchase insurance. Several insurance
companies deny providing certain benefits and frequently underpay claims. As a result, the majority of
individuals simply consider insurance to be an unnecessary expense. Due to financial difficulties, many
insurance companies do close their doors, and those who suffer losses don't even hesitate to buy
insurance.

Finally, obtaining insurance for those with pre-existing conditions is a difficult and drawn-out
process. This has a strong deterring effect.It is highly possible that the consumer won't find it
convenient to buy a policy if the insurance provider hasn't automated its processes.

In conclusion, Just because the challenges seem insurmountable or huge, doesn’t mean they
don’t come equipped with solutions