The National Insurance Commission (NIC) has reiterated its stance on the passage of the Compulsory Group Life Insurance Law, which is expected to cushion employees in the likelihood of unpredictable circumstances.
The bill which is currently being processed by the Ministry of Finance before its passage will mandate employers to purchase group life insurance policies for their employees to aid them plan financially and reinforce employee confidence.
According to the Deputy Commission at the NIC, Michael Kofi Andoh, the passage of the bill into law will afford beneficiaries of employees a multiple salary of their annual income in the likelihood of unpredictable circumstances.
“So, what happens is that if the bill is passed, any employee who dies while he is still employed gets some insurance benefits. Of course, depending on whether there will be a few exceptions from cause of death,” Mr Andoh noted.
“For example, COVID-19 related deaths involving employees would have been covered if the law had been passed. So, it is a very important and crucial intervention and we are looking forward to the passage of the law. Currently, the bill is somewhere at the Ministry of Finance and I know they are working hard on it to get it processed and passed so we are looking forward to its passage and its implementation,” he added.
The Deputy Commission however indicated that the Group Life insurance law, when passed will not shelter all other kinds of life insurance policies.
“There are things that group life would cover. That doesn’t entirely replace all sort of life insurance that you can do. For example, it may not give funeral cover. Funeral insurance is a relevant cover and there are other relevant life covers that will still be relevant so that would not entirely replace all types of life cover. The second thing is that it will be for employees. You know majority of Ghanaians work for themselves, of course you can buy a life policy if you want, but this is a compulsory group life, and it is mainly for employees. So, all employers will be required to buy some kind of group life policy for their employees,” he concluded.
Meanwhile, the NIC had earlier said insurance penetration in Ghana may not witness an increase as earlier projected should the Coronavirus outbreak persist.
The insurance sector, which currently has a 2 percent penetration rate coupled with the coronavirus could adversely affect life insurance policies sold to the public by insurance firms.