The National Insurance Commission, NIC, says it is looking forward to the passage of the Compulsory Group Life Insurance Law as it would be useful to employees who may suffer damages or lose their lives to unpredictable situations such as the coronavirus pandemic.
Group Life Insurance assures employees that in the unlikely event of death, disability or critical illnesses, a multiple of their annual salary will be provided to their beneﬁciaries as a replacement income.
When Ghana passes the Bill into law as exists in other countries, employers would have to compulsorily buy group life policies for their employees.
Deputy Commissioner at the NIC, Michael Kofi Andoh, told Citi Business News the law would be useful to employees when passed.
“So what happens is that if the bill is passed, any employee who dies while he is still employed gets some insurance benefits. Of course, depending on whether there will be a few exceptions from cause of death. For example, COVID-19 related deaths involving employees would have been covered if the law had been passed. So, it is a very important and crucial intervention and we are looking forward to the passage of the law. Currently, the bill is somewhere at the Ministry of Finance and I know they are working hard on it to get it processed and passed so we are looking forward to its passage and its implementation,” he said.
Mr. Kofi Andoh however explained that Group Life insurance will not cover all kinds of life insurance policies.
“There are things that group life would cover. That doesn’t entirely replace all sort of life insurance that you can do. For example, it may not give funeral cover. Funeral insurance is a relevant cover and there are other relevant life covers that will still be relevant so that would not entirely replace all types of life cover. The second thing is that it will be for employees. You know majority of Ghanaians work for themselves, of course you can buy a life policy if you want, but this is a compulsory group life, and it is mainly for employees. So all employers will be required to buy some kind of group life policy for their employees,” he added.
Importance of Group Life Policy for staff
With Group Life Insurance, there are readily available funds to take care of employees when accidents or deaths occur.
A group life policy alao helps employees plan ﬁnancially as it takes care of unforeseen life events, and improves employee commitment and loyalty as employees know their employers have their best interest at heart.
It also serves as a way to attract and keep the best employees in an organization, as employees are comfortable knowing their families will be assisted ﬁnancially when they are no more.