GENERAL manager of JN Life Insurance Hugh Reid has warned that the low number of Jamaicans with adequate insurance and pension coverage could have adverse implications for many families and the economy.

According to Reid, more than 80 per cent of Jamaicans are without a pension plan, and about the same, or even more, are either underinsured or without insurance.

He explained that this means that several families are at risk of financial hardship if their breadwinners die or are diagnosed with a major illness. In addition, Reid said, most Jamaicans are unprepared for retirement and the financial and other challenges retirement brings.

“The number of Jamaicans without a critical illness plan in place in the event of being diagnosed with a chronic illness is probably even higher than 80 per cent. As a result, many families undergo serious financial hardship when a breadwinner dies or is diagnosed with a critical illness, as typically the cost of treatment will run into millions of dollars and in some cases, tens of millions of dollars,” said Reid.

He noted that life insurance has many benefits to economies and families. Beyond the guarantee to pay a stated sum to family members who are the beneficiaries on the death of its income earner, life insurance can also serve as a means through which individuals save because many people who might not otherwise save consistently will, nonetheless, regularly pay their life insurance premiums.

Reid added that this can constitute a type of quasi-compulsory savings.

He explained that pension products, such as the JN Retirement Scheme (JNRS), provide a convenient, if not unique, means by which individuals who are not a part of a company pension scheme can make financial provisions for retirement.

Additionally, individual retirement scheme plans, such as JNRS, can supplement, if not substitute for, retirement benefits provided by the Government.

“When you look at those without any form of a pension plan or inadequate pension, it means many Jamaicans will, in their retirement years, have to depend on family or the State to survive, and this has wider implications for our economy, because the State will have to use scarce taxpayer dollars to undertake the responsibility to provide for those in need,” added Reid.

He noted that one of the effects of having little or no critical illness insurance was that many families are robbed of loved ones whose deaths could have been prevented.

“In terms of critical illness insurance, every Jamaican should have at least two such policies as, for example, a cancer diagnosis which involves surgery and chemotherapy/radiation could easily exceed $5 million if private health facilities are utilised.

“Unlike many policies on the market, JN has a critical illness policy that provides a recurrence benefit which allows customers to make multiple claims over time or for critical illnesses that recur. This JN Life Aide, critical illness policy, will, therefore, assist many families who would otherwise lose loved ones whose deaths were preventable owing to the costs associated with treatment and not having insurance to cover them,” Reid pointed out.

The JN executive added that insurance should not be viewed as preparing for death but rather giving loved ones a chance at life.

“Having a pension is not just for those who are getting up in age. It is about securing a future for yourselves and loved ones. Similarly, insurance is a good way to assist you in terms of planning financially. It ensures that your family can cope should you be affected by unfortunate events. Many of us should remember that the reason you buy life insurance is not because you are going to die but because those who you love are going to live,” said Reid.