In Zambia, there are two main types of insurance in a broad perspective. This includes the General insurance which comprises of the non-life insurance and normally on a short term basis and a Life Insurance which usually runs on a long-term basis.
1) General Insurance
General Insurance consist mostly short-term insurance policies. There are several broad categories of insurance provided in Zambia which include the following;
- Health Insurance
- Motor Insurance
- Travel Insurance
- Home Insurance
- Fire Insurance
2) Life Insurance
Life insurance usually runs on a long-term basis between the policy holder and the insurance company. Under life insurance, the common types of life insurance available in Zambia include the following;
- Term Life Insurance
- Pension Plans
- Whole Life Insurance
- Endowment Plans
- Child Plans
If you are looking to get an insurance cover in Zambia, you need to determine what are your needs and what you specifically need to insure. Generally, they will either fall in one of these categories.
With this, let me take you to a deeper understanding on these broad categories and what you expect on each.
1) General Insurance (Non-Life Insurance)
General insurance is usually a short term period insurance which in most cases runs on an annual basis. General insurance can be further categorized into two categories which include;
- Personal Insurance – This is the insurance you can get in Zambia for individuals only
- Commercial insurance – This is the insurance policies meant for commercial entities
In general insurance there are several subcategories which fall in either personal or commercial insurance dependent on whether the policies are meant for individuals or for commercial entities. Below are some of the several General Insurance or the Non-Life Insurance provided in Zambia.
a) Theft insurance – This insurance policy protects you against financial loss or harm caused by the theft of your belongings. Burglary insurance, money or cash in transit insurance, and other types of theft insurance are included in this category.
b) Industrial Fire Insurance – This is a form of insurance policy that protects against property loss or damage caused by lightning, fire, or explosion. Plant and machinery, stock insurance, buildings, furniture fixtures and fittings, and office equipment are all covered under this policy.
c) Home (Fire Domestic) Insurance – This policy protects your home (structure) and possessions (content) from dangers such as fire, theft, harsh weather damage, and other losses. Domestic workers, occupiers, and owners liabilities might all be covered by the policy.
d) Public liability insurance – This insurance policy protects you on any personal injury or property damage claims brought by a third party as a result of your company activity. Product and professional liability insurances are two more forms of liability insurance.
e) Medical insurance – This insurance policy supports the insured and their dependents’ medical bills. Out-patient and in-patient coverage, as well as dental and optical extensions, are prevalent.
f) Personal Accident Insurance – This policy pays out in the case of injuries, disabilities, or death resulting entirely from external, observable occurrences. A group of individuals, such as workers, can also get this insurance.
g) Motor Private/Commercial Insurance – This policy covers loss or damage to the vehicle, as well as third-party legal liability for death, injury, or property damage resulting from the usage of the vehicle. Motor private refers to vehicles used for personal or domestic use, whereas motor commercial refers to automobiles used for business or commercial usage.
h) Work Injury Benefits Act (WIBA) – This is the insurance policy that gives financial compensation to employees who are injured, incapacitated, or die at work as a result of an accident. This is a legal obligation that Zambian law enforces.
i) Engineering Insurance – This is provides coverage for a number of hazards related to the installation, resting, and operation of machinery, plant, and equipment.
2) Life Insurance
The second broad type of insurance offered in Zambia is the life insurance which usually runs on a long-term basis between the policy holder and the insurance company. The beneficiaries of these policies are not the policy owners but the people they choose to be beneficiaries upon death.
These policies ensure that your loved ones still enjoy quality of life even after a misfortune has happened in your life. Life insurance policies can act as protection policies only or also have a combination of protection and investment in form of savings through which they might also earn you interest on long-term savings.
In life assurance type of insurance, there are several classifications of life assurance policy which include the following;
a) Pension or Retirement Plans – Insurance firms primarily provide pension/retirement plans to assist individuals in accumulating a quantity of money that may be utilised in retirement. Employers, for example, can participate in pension programs. The money is invested by the insurance company in order to create a regular income for the retiree, which is known as a pension.
b) Group Life Insurance – This insurance policy consists of group life insurance schemes, which are primarily organized by employers on behalf of their employees; group credit/group mortgage schemes, which are loan protection schemes organized by financiers such as banks, co-operative societies, microfinance institutions, and so on; and last expense schemes, which can be purchased separately or as a rider to group life schemes.
c) Annuity – Apart from the retirement plans, another option to prepare for retirement is to purchase an annuity. An annuity is a contract in which a person pays a one-time premium to an insurance company. The insurance company then pays the individual a lifelong income based on their premium.
d) Funeral insurance – This is a life insurance policy that pays for funeral costs if the insured or their dependents die. It is available as a stand-alone policy or as part of a larger insurance package, such as life or medical insurance. Every 12 months, it is renewed.
e) Ordinary/Individual Life Insurance – This life insurance policy refers to all individual life insurance plans that are classified as Term Assurance, Whole Life, Endowment, or Investment.
f) Investment Insurance – This is a life insurance policy which provides solutions in a combination of insurance and investment into a single plan for policyholders. The main goal is to help the client/policy holder expand his or her investment capital.
Having an insurance policy in Zambia assures you of a protected future. No one knows about the next minute and hence the need for being cautious in case a misfortune happens. Insurance policies such as medical insurance policies are key. Other insurance policies such as those of motor vehicles are mandatory from the insurance laws.