2023 International Insurance Awareness Day

Written by -

 

International Insurance Awareness Day is celebrated every year on the 28th of June to encourage, educate, and alarm people about the importance of developing a culture of insurance and saving that secures an individual's or family’s future in the event of an emergency or unplanned event. Tolani (2019) simply defines insurance as the process of transferring financial risks to a third party who will compensate for insured risks such as accidents, deaths, motor vehicle repairs, and health expenses. Tolani further states that the three general types of insurance are life, medical, and non-life. Depending on which product one invests in, some offer emergency loss recovery, and others are life insurance that is also given as a lump sum if the policyholder is alive when the insurance term has expired. This essay will first discuss the importance of managing money, and secondly, it will highlight why it is important for people to invest in savings and protect themselves with insurance. Finally, it will suggest ways to increase awareness about insurance.

                                                    Image source: BSP Financial Group | Facebook

Firstly, money dictates important actions such as going to university, purchasing a new vehicle or house, or recovering from financial losses in business. As such, it is important to have control over your finances by managing money well. Managing financial losses by investing in insurance products has many benefits, such as being financially independent, managing risks and money well, and building your financial confidence. According to the International Labour Organization (2023a), "insurance is a financial tool that can help households and businesses better manage risks and money without having to resort to harmful coping strategies, such as selling assets, depleting savings, or borrowing money at high interest rates".

Secondly, investing in insurance products ensures proper management of risks. Being able to manage risks means controlling the effects of financial losses and thus having an influence over how to recover from unexpected events. Risk insurance refers to the risk of the occurrence of something unexpected that might include the loss or damage of valuable assets or the injury or death of a person (Srivastav, 2023). Being able to manage financial risks is a significant step towards being free from financial burdens. As such, choosing to invest in insurance products means choosing to protect the interests of your family, career, or business.

In addition, investments in insurance products build financial confidence. According to Zalis (2018), an important aspect of financial confidence is investing it in areas such as savings and insurance products that accommodate unexpected risks. Growing your financial confidence leads to success in other areas of life, such as career, business, family relationships, education, health, and other social engagement activities. Insurance products build financial confidence in people because they eliminate the burden of unforeseen inconveniences that may occur.

Furthermore, insurance products contribute to better money management. Morrow (2023) supports this by stating that insurance is a need when it comes to net income breakdown and management. Using insurance products prevents one from exhausting financial resources when unexpected events occur. It allows one to satisfy other financial responsibilities, such as family obligations, without worrying about other burdens, as the insurance products cover them. It allows one to focus on other financial goals and plans. Jadhav (2023) stated that saving and investing are crucial to achieving financial goals, but to manage money well, one must realize that these are as important as preparing for unforeseen events that may derail other financial plans. As such, not only is insurance an important aspect of managing money, but it also contributes to a better quality of life (First State Community Bank, 2020).

Thirdly, in PNG and other Pacific island countries, more effort should be invested in research to understand the basic dynamics of insurance and the knowledge level of the public on the subject. For example, research may help identify strengths, weaknesses, opportunities, and threats in relation to insurance and how the public or a portion of the population understands it. Quality research exceeds expectations and identifies data that can be used to improve service or attract more people to purchase insurance products. The International Labour Organization (2023b) has uncovered that some people simply avoid financial products such as insurance because they simply do not understand their importance; research helps to identify such areas for improvement. Research can also identify markets for insurance products, such as new graduates who may want to build a healthy financial foundation or families intending to purchase their first house.

Additionally, PNG has a high level of illiteracy at approximately 63.4% among adults (Port Courier, 2018); as such, the publication or media coverage of the benefits of insurance products has great potential to inform new customers and attract more policyholders. Great publications ensure that the right information is communicated to a specific audience in a format where it can be understood. Marketing strategies and publications should be tailored to different audiences; for example, new graduates would most likely be interested in motor vehicle insurance. Publications should also be extended to suit the needs of different levels of education, such as primary and secondary. Children that learn and understand the value of money early in life are more informed and are likely to invest in insurance products, whereas an individual who has limited understanding will prefer not to invest.

In conclusion, insurance products allow policyholders to transfer the effects of unexpected losses to a third party. The common types of insurance are life, medical, and non-life; from these, one has the option of choosing based on his or her needs. It is important to manage money well in order to benefit from it. Insurance is one of those areas where, when invested, it relieves one of many unforeseen financial burden. Purchasing insurance products helps to manage risks well and build financial confidence. However, many people in PNG do not know the significance of insurance; as such, to increase public awareness of insurance, research and improved broadcasting and media publication will inform and attract more people.

Reference

Editor - Post Courier. (2018, September 4). Literacy rate remains low. Post Courier.             https://www.postcourier.com.pg/literacy-rate-remains-low/

First State Community Bank. (2020, January 28). 5 Worthwhile Benefits of Financial Self-care. Financial Management and Insurance Division. https://www.fscb.com/blog/5-worthwhile-benefits-of-financial-self-care

International Labour Organization. (April 28, 2023). Financial education: the role of insurance. International Labour Organization – Analysis. https://www.ilo.org/global/topics/employment-promotion/social-finance/financial-inclusion/WCMS_879354/lang--en/index.htm

Jadhav, K. (2023, May 11). 4 Benefits of Including Insurance in Your Personal Finance Strategy. PersonalFN. https://www.personalfn.com/dwl/Insurance/4-benefits-of-including-insurance-in-your-personal-finance-strategy

Morrow, J. (2023, January 17). How to Manage Your Money in 3 Simple Steps [YouTube Video].  https://www.youtube.com/watch?v=iJBDn9YKUtk

Srivastav, K. A. (2023). Risk Insurance. WallStreetMojo. https://www.wallstreetmojo.com/risk- insurance/

Tolani, S. (2019, August 18). What is Insurance? The Financial Planning Process [YouTube Video]. https://www.youtube.com/watch?v=FtmQKJRB2Rc

Zalis, S. (2018, June 16). 8 Steps for Growing Your Financial Confidence. Forbes.             https://www.forbes.com/sites/shelleyzalis/2018/06/16/women-money-8-steps-for-growing-your-financial-confidence/

My name is Banabas MENEI. I am from Manus and Eastern Highlands provinces in PNG. I have a Bachelor of Arts Degree in PNG and International Studies (2023)

Comments

Post a Comment

Popular posts from this blog

Bernard Narakobi and the Melanesian Way: A Beacon for PNG and Melanesia

Written by -
  In the lush and lavish landscape of Papua New Guinea’s cultural heritage, Bernard Narokobi stands as a leading light—a flagbearer for the Melanesian Way. Something I support and hold very dear. His vision transcends mere diplomacy; it weaves together tradition, identity, oneness, and resilience. I have always wanted to write about this great man who gracefully defended true Melanesian ways, much of it, through his writings but I always assumed any writing I did of him or that of his work would fail to give justice to his greatness – for people like myself, who are traditionalist and love writing, Bernard Narakobi stands at the top, in PNG alone, very few people can fill his shoes.     Narokobi’s seminal work, “The Melanesian Way,” resonates like a kundu drum across the islands of the Pacific. At a time when the waves of foreign influence or globalization were knocking on the stairs of Melanesia, questioning our values and misinterpreting our way of life – Bernard d...
Read more

Bushwara Symphony - One of Sorrow and Betrayal

Written by -
In the heart of Port Moresby, where the sun blazes like an angry god and the air hangs heavy with thick dust, a tragedy unfolds— the orchestra plays a symphony of heartlessness. This is the Bushwara Eviction, a tale carved in sorrow, imprinted in the tears of widows and the cries of children. The decision was final – the Judge gave a 120-day notice to move. Bravo! Now you get to sit on your couch, with your family, warm and everything, and watch. A delight it must be. Imagine a community clinging to life on the fringes of society. Houses filled with love and hope. Mamas saying a prayer for the looming eviction. Here, children play barefoot in the dust, their laughter echoing off corrugated iron walls. But their innocence is fragile, like blossoming Hibiscus. They know the eviction notice looms—a countdown to homelessness, a countdown to shattered dreams. Like other evictions, what is happening at Bushwara did not just break down homes but more important to this nation, the people’s pat...
Read more

Analysis of Social Work Ethics and Values

Written by -
  In layman’s terms, social work means striving for social good and social justice. Sometimes social work requires those who strive for these ends to place other people’s needs before their own. But for a much more discrete definition, the International Federation of Social Workers (2021) defines social work as working in communities with people to find positive outcomes in the challenges they encounter. Social work allows people to build their desired environment to live in. Gazzola (1998) describes social workers as unsung heroes, people who have chosen the noble profession of "helping" others. Casual help is a natural and humane act, but choosing to help others as a profession begs a lot of questions. What are the underlying factors that influence the latter action? What allows or guides social workers to continue to help people diligently? These questions act as guides to the aim of this paper. The aim of this thesis is to analyze ethics and values and assess how they are...
Read more