Chukwu Oteh
Social groups comprise people that come together with a common sense of unity and identity. In most traditional African societies, it is a common practice for people to team up for further interaction and development of their communities.
To enhance group cohesion, people of certain age brackets are encouraged to form social groups for diverse socio-cultural interests. Depending on community diversity and dynamics, this social group could be a group of people born within a certain period (age grade), people who came out of the same lineage (family meeting), or people who came from same community (community or welfare unions). It could also be people who share the same religious affinity (church and mosque). There are also associations or groups from people who came together to further their common and individual interest, such as clubs, etc.
Many reasons are advanced for joining social groups. They range from welfare to development. There is evidence in most communities of social group impact on welfare and infrastructure development. For instance, in most places in the eastern part of Nigeria, many age grades are advancing infrastructural development and making serious impacts on Sustainable Development Goals (SDGs). Interestingly, one of the unique characteristics of these groups is the ideal of ‘be your brothers’ keeper.’
To achieve their intents, groups levy their members and mobilise resources for assistance to members, where necessary. For instance, in the case of death, they organise and mobilise resources to bury their member. Some of the things such groups do, depending on their rules of engagement include purchasing caskets for the deceased and offsetting other burial expenses. This is meant as not only to identify with the deceased’s family and give respect to the deceased member but also to reduce the financial burden on the family. Perhaps this explains the ‘what is in it for me’ question the deceased member answers before joining the group.
However, when we analyse the death benefit that has been derived from the traditional levy system, it leaves much to be desired as the amount given does not in any way scratch the financial needs of the deceased’s family at that material time.
Curiously, insurance does a better function of ameliorating the financial difficulty of the family when a loved one dies. Rather than the traditional levy collection at the death of a member, the group could decide to purchase a group life scheme for all its members. This is not only convenient but also a very smart move that will cushion the financial burden of the family left behind in the case of death of a member.
The group life insurance scheme covers members of a group. This group could be any of the groups listed above or more – church, mosque, age grade, social club, welfare union, etc. The scheme provides financial compensation in the event of death of a member. Interestingly, it is a 24-hour worldwide cover against natural or accidental death. And, just like any other insurance policy, it is renewable annually.
The benefit of the group life scheme over the traditional levy payment on death of a member cannot be overemphasized. The family of the deceased will receive a guaranteed sum pre-determined by the association prior to the burial of the member. The guaranteed sum is not only sufficient to cater for casket purchase but will be enough to take care of other funeral expenses and the remaining enough for the dependents of the deceased to start a sustainable business.
Section 4(5) of the Pension Reform Act 2014 makes it mandatory for an employer of labour whose staff strength is more than three to provide a group life scheme to its staff, at least three times the employees’ total emolument as benefits. However, for members of the association or group, they are required to choose the value of their benefit and pay premium likewise. While the employer pays the premium as part of the employee’s entitlement, members of the associations or groups are required to pay up their premium. The good news is that the premium is very nominal.
This process makes for insurance inclusiveness. It is an opportunity for one who hitherto did not have the financial means to buy insurance to be insured. Moreover, there could also be riders to the group life scheme. That is to say, the group life scheme could be bought alongside the following, burial/funeral expenses, critical illness, permanent disability, total temporary disability, etc.
The holy book admonishes fathers to leave an inheritance for their children. However, harsh economic realities have made this advice a tall dream for most men. Interestingly, the group life scheme has come to the rescue as it affords a man who does not have money to buy a personal life insurance policy the chance to procure one by paying a nominal amount. This is not only expedient but also smart.
Buy a life insurance today.
• Oteh is a chartered insurance practitioner based in Lagos. He could be reached on 0807 838 8333.