Airtel’s Mobile Life Insurance Cover Reaching Out to Uninsured

WHEN Vincent Mbambe, 32, of Garden House area in Lusaka lost his father in April, this year (2014), challenges of meeting funeral expenses were huge.

To bury his father, who lived in John Laing Township, where most people are unemployed, he had to borrow money.

It was just about the same period when a message popped up on his late father’s phone he was using for communication.

The message popped up the phone and he quickly read.It was talking Airtel Life Insurance cover and how much the father had accumulated in that month. At first, he thought it was a hoax or scam of some sort.

After reading the message, he quickly called the customer care centre to find out about the authenticity of the message.

For sure, it was authentic.

The call centre attendant told him that his father was eligible for life insurance cover. And so, he needed to provide the death certificate, burial permit, National Registration Card (including his), and the order of appointment as the administrator from the courts of law.

He could not believe the news, but he rushed home and got the required documents.

He was given a cheque of K2,000. Even though he lost a loved one, at least his burden was made lighter as he was able to settle the debt accumulated during the funeral.

“The money came in handy. At first, I was very skeptical about the whole process. This is a good thing because it even helps the poor,” he said.

Airtel Zambia recently announced the introduction of Airtel Life Insurance to their product portfolio.

The giant telecommunications company is venturing off into another arena of the economic sector, namely, insurance. It is a very significant business move in that Airtel Zambia is the first company to do something of this magnitude in the country and perhaps region.

It has partnered with major insurance players, Micro Ensure and African Life Assurance, which follows a claim validation process to ensure the beneficiaries are genuine.

The product is tied to the amount of airtime one buys so for this reason, anyone in the low-income bracket should be able to afford some form of life insurance, which is very essential in one’s financial planning. In the eventuality of the subscriber passing on, his next of kin, spouse and children or parents etc will have access to a cash lump sum which can be used to further children’s education, medical bills for aged parents and other things.

Airtel Life Insurance is a free insurance product that covers the life of a subscriber and is offered to all Airtel customers. This happens in the event that a subscriber passes away a cash payment would be made to the subscriber through their next of kin.

The amount to be paid depends on the total amount of airtime the subscriber recharges prior to the event (death). A claim can only be made in the event of death of the subscriber.

Yes death for any other reason than suicide, abusing alcohol or illegal drugs.

The next of kin should make the claim in that case.

Interestingly, this initiative eliminates the seeming complexities and paper work often associated with insurance and makes it attractive and convenient.

All Airtel customers, who are residents of Zambia with valid identity cards (ID) at the time of registration, are automatically enrolled into this insurance.

According to head of corporate communications and Government relations Yuyo Nachali-Kambikambi, one needs to simply recharge K 10 or more to get cover for free.

“Being an Airtel subscriber and topping up a minimum cummulative total of K10 or more, automatically qualifies one for the insurance cover in the next month. The more you top-up in the current month, the more cover you get the following month,” Ms Nachali-Kambikambi said.

The benefit is only paid out following the demise of the qualifying customer.

The product has been described as “a simple and convenient way subscribers can access an affordable life protection plan directly from their mobile phones.

She said the insurance life cover was safe and secure, saying subscribers should not worry about cheating as the telecommunication had entered into partnership with reputable organisations to provide this product which is underwritten by African Life Assurance Zambia Limited who are currently the biggest providers of individual life policies.

Further, the service is being administered by Micro Ensure Zambia Limited which is also the biggest micro-insurance service provider worldwide with vast experience in making insurance available to people who need insurance most but have the least access.

“This tripartite agreement provides enough security and safety for the Airtel subscribers,” she said.

More than three million subscribers are currently covered with Airtel Insurance and have been communicated to. The customers do not need to sign up as it is an automatic enrollment based on customer’s top up behaviour.

Now, in the case of tablets or gadget such as Samsung Galaxy, Apple and so forth, which belong to the company but the sim card is registered in one particular user (salesperson 1).

A question may be asked who benefits from the insurance if that salesperson 1 leaves the company and the tablet remains with salesperson two who continues buying airtime for it?

Ms Nachali-Kambikambi said the beneficiary would be the person who was using the sim card at the time of claim in this case salesperson 2.

“The company will show as the owner of the Sim and it may be registered under the account manager but we do collect personal details of the people actually using those Sim cards and they become the primary user covered,” she said.

Insurers Association of Zambia (IAZ) President Shipango Muteto said the insurance innovation introduced by the telecommunication company is a welcome development.

He said the innovation would help make insurance available and accessible to a vast portion of the Zambian uninsured population.

“As an Association we fully support this product and many other products that other Life insurance companies have launched in partnership with mobile telephone companies.

This would undoubtedly increase the insurance penetration among the Zambian population who over the years did not appreciate the benefits of insurance,” he said.

True, the importance of having insurance cover could be over-emphasised, adding that Airtel has created an affordable platform for subscribers to get their covers with ease and convenience.

Low income households face a lot of risks or problems, with little or no means to address their issues.

Timothy Kaputo, a marketer by profession, believes the basic life insurance is a plus for low income groups.

“I just think there is need for more education about the products. Even though the money is only accessed after someone passed on, it still serves concrete purpose for those left behind,” he said.

Airtel Insurance takes a unique approach by making basic insurance to cover for funeral and other expenses all in a bid to lessen the burden on the people left behind.

So far, there have been several beneficiaries.

Betty Phiri lost her mother on June 16th and after learning about the insurance life cover through a friend she could not hesitate but to contact the Airtel.

She was later referred her to MicroEnsure who gave her a cheque of K5,000.

“This is a good product for us the poor.There is need for Airtel to educate people about this product because many people don’t know about it,” she said.

As in the case of Mr Mbambe, she was asked to present relevant documents.

Some of the benefits of the whole process are that it is easy to reach out to customers and tell them that they have a benefit.

The message gets out to the customers at the same time regardless of geographical location

It is easy to educate the masses about simple and basic insurance and other financial services that are available to them whether free or paid up.

There is no need to apply. No paper work is needed and claims are simplified to ensure the benefits are easily available to the intended recipients.

Diagram-Cover is calculated based on only previous month’s top-up.

This means that cover is renewed and reset monthly. Airtel looks at how much the customer topped up the month before their passing and bases the claim payout on this.

Another beneficiary Justine Mukuka received a cheque of K10,000, which the family, he said, was putting into a good use.”As a family, we lost someone who was very dear to us.

The money has been of great help to us,” he said.

Being a next of kin to the late and legal administrator, he was happy with the coming of the insurance cover.

Mr Mukuka learnt about the insurance cover by way of an SMS that flashed on the deceased’s phone.

There is no doubt that paying for one’s funeral expenses or for those of a loved one can be costly.

Thus, the Airtel Life Cover comes in handy in a country where the majority of population is poor.As for Samuel Simwanza, who lost a brother, he got K5,000 saying the money would be invested for the purpose of growing it.

“My brother left a son, who I want educated through the same money. I want to invest it,” he said.Such innovations might just as well somehow bridge the gap.

Further, with a population of more than 13 million, many Zambians are actually without life insurance policy.

That is just the way it is.

But is that the way it should be? The only proper solution could be low cost life insurance. Such policies allow the people from low income groups to have life insurance policies.

Everyone has the right to insure himself so that in the event of his death his family has something to fall back upon in the state of severe emotional and financial distress.

But the general high price of life insurance premiums prevents people from having a life insurance policy.

But now, with low cost life insurance they also have an option.It can only be hopped that more people would be educated enough to know more about the life insurance cover.

Source : The Times of Zambia

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