Themba wants to discuss what insurance is and how it can help her. Insurance is there to protect you from unforeseen events as well as from some events that we know will happen but don’t know when. The insurance company agrees to insure you for a certain amount with certain conditions.

SHORT-TERM INSURANCE
Short-term insurance is insurance that covers your assets such as your car, house, household contents, business and even your salary. Salary protection refers to paying a premium each month to ensure that you still receive your salary if you are unable to work due to sickness or injury.

LONG-TERM INSURANCE

Long- term insurance covers you for events that you could expect to happen.
Some examples of long-term insurance are:

• Life insurance (sometimes called funeral policies) – pays out on the death of the insured person
• Disability insurance – pays out if the insured person becomes disabled
• Retirement policies – pays out when you retire
• Endowment policies – pays out after a fixed term

A lot of companies and stores offer funeral policies. You need to make sure that you have the cover you need for the price you can afford. Do not take out too many insurance policies because you may end up paying a lot in administration fees. Make sure that you are not paying for additional insurance that will not result in a bigger pay out.

There are many insurance providers, so you need to shop around to make sure you get the cover you want at the best price. When comparing different companies make sure they are offering the same cover and don’t just choose based on the price. You must also check that the value you are insured for is the correct amount and isn’t for too little or too much.

UNDER-INSURANCE

Under-insurance occurs where the sum insured is less than the amount of the loss that the insured would suffer if the risk should materialize. For example, a house is insured for ZWL100 000, but its market value is ZWL150 000. A person in this circumstance may only recover the loss that is actually insured for i.e. ZWL 100 000.

OVER-INSURANCE

Over-insurance occurs when the sum insured is greater than the loss that the insured would suffer if the risk materializes. For example, a house is insured for ZWL200 000, but its market value is ZWL150 000. Even here, the insured may not recover more than the loss he actually suffered.