Bancassurance – A tool for personal wealth protection

“An Investment in knowledge always pays the best interest” – Benjamin Franklin

When a bank decides to sell the life and non-life insurance products of an insurance company through its branch and digital network, that relationship is termed Bancassurance. That relationship exists ultimately to the benefit of the bank’s clients with the bank’s frontline and increasingly, its digital platforms becoming the point of contact and point of sale to the clients.

Bancassurance is most successful in Europe with France being the most developed market. In Ghana, Standard Chartered Bank have continued their long-standing history as trail blazers by being the first to pioneer Bancassurance in November 2007, partnering with Enterprise Insurance Company to bring insurance products into the banking hall for clients.

Insurance is very key in financial planning and one of the pillars of personal finance, the convenience and simplicity which bancassurance offers makes it a product deserving of consideration. I would even go so far to say it is the most vital. Yet it is among the least accessed financial instruments, perhaps due to the complexity of insurance, the posture of those who sell it or merely our preference for avoiding the topic of our own demise or accident. Armed with the proper information however, you can simplify the decision-making process and arrive at the right choice for you and your family.

There are many insurance companies out there and the constant bombardments on the airwaves of their different product offering makes choices an onerous task. Before making an investment, it helps to have an additional source of information you can trust; such information can be from your own bankers. Chances are, you’ve been with your bank for many years and you are sure that they will always keep your money safe and secure. This is where bancassurance comes in.

It should be noted that Bancassurance is not a technique for making sales. It is a tool for financial protection. It is a sound investment because it gives you and your family financial protection in case of sickness, death or other possible negative eventualities. It also gives you peace of mind, knowing your loved ones will be taken care of no matter what happens. Bancassurance helps you achieve financial security, wellness and risk transfer. Thus, the partnership between a Bank and an Insurance company becomes even more advantageous to their customers.

Benefits of bancassurance to you

Accessibility of insurance

The intricacies of insurance especially Life Insurance is compounded if you don’t know where, when and how to get it. With bancassurance, life insurance becomes easily accessible because now you can purchase a policy in any of the bank’s branches or on its digital platforms. All you need to do is to walk into any branch to inquire and a well-trained bancassurance sales executive will be happy to assist you. It’s as easy as withdrawing money or making a deposit.

High regulatory standards

As someone who works hard to make a living, you probably would be very cautious with who you hand over your money to. As much as possible, you try to make wise choices to avoid getting scammed. Bancassurance by its nature brings two companies with a good reputation and a long history of service to clients. Since these companies are vetted by the Bank of Ghana and the National Insurance Commission, you know your investment is safe and that you and your loved ones can reap the benefits in the future.

Deep relationship with your bank

Traditionally, insurance agents take care of your insurance for you. That’s all well and good, but agents are usually on the go since they have multiple clients to attend to. They may not always be able to meet you anytime, anywhere and may change jobs regularly by moving from one insurance company to the other. A change in job means a new set of products to contend with and possibly be persuaded to buy. With bancassurance, there is less reliance on traditional agents since the bank becomes your one-stop shop for all your financial needs.

Top most convenience

Paying a lot of bills could be very challenging especially when you must keep track of and manage multiple accounts and expenses. With bancassurance, there is one less headache to worry about since the arrangement allows direct debit from the client’s bank account to the insurance company. This provides convenience and a secured payment rather than a manual transfer of payments between the two parties.

Product variety

The arrangement between the bank and the insurance companies ensures that the two sets of financial professionals share ideas, expertise and insights too provide a more ideal product and client experience. They can find more inventive solutions and offer a more comprehensive range of products that address the needs of their customers.

At the end of the day, you and your family deserve the financial security and wellness that you worked so hard for—and Standard Chartered Bank is committed to helping you achieve it. No matter what your status in life, you’ll be able to find an affordable life insurance product to suit your needs.

Financial needs analysis

In keeping in line with its tagline, “Here for Good”, the bank would conduct a proper analysis based on your needs and finances to ensure that a suitable product within your financial capability is offered to you.

Protecting with bancassurance

If anyone relies on you financially, you need life insurance.

Financial responsibility does not just come as a spouse or a parent but also as a child of dependent parents, the sibling of a dependent adult, an employee, employer or business partner. If you are stably retired or financially independent, and no one would suffer financially if you were to be no more, then you don’t need life insurance. However, this is highly unlikely and so consideration should be given to using life insurance as a strategic financial tool against life’s unexpected eventualities.

Life insurance does not simply apply a monetary value to someone’s life.

Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life. Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expenses and lost income. But most importantly, in the aftermath of an unexpected death, life insurance can lessen financial burdens at a time when surviving family members are dealing with the loss of a loved one. In addition, life insurance can provide valuable peace of mind for the policy holder. That is why life insurance is vital for the bread winner of a single-income household, but still important for a stay-at-home spouse.

Business continuity

A business generally suffers when a principle partner dies. However, you can minimise the impact of the loss on a business by insurance which can be used to protect that business’s assets. This can be achieved by using it as a source of funding for a buy-sell agreement. The assets can be kept with the business rather than having to sell them off to buy out a partner’s share.

Paying for health and disability costs

Life Insurance allows clients to pay for critical illness and disabilities. That way, you won’t have to deplete your savings or sell off investments to cover unexpected medical costs or long-term care.

Life’s Legacy

Life Insurance offers more than death benefit protection. It allows you to imprint an indelible mark on the lives of your dependants by providing income even in retirement, unplanned medical needs or other emergencies. These would usually be a responsibility on your children later in life and life insurance allows you to ease that burden on them.

Retirement Plan

Bancassurance offers business owners, who most likely do not plan for their retirement due to focusing on their business, the chance to diversify income sources and accumulate savings and investments towards retirement and a provision of benefit in case of death. Also when business shuts down, owners are able to cushion themselves with the benefits of life insurance s they count their losses and make preparations for the next step.

The writer is the Country Head for Wealth Management at Standard Chartered Bank Ghana. In partnership with asset management firms and insurance companies, the Wealth Management team provides a range of products and solutions to help our clients grow and protect their wealth. Our clients span the full spectrum, from individuals to small business and corporate clients. We have teams of Investments Advisors, Insurance Specialists and Treasury Specialists who interact with clients, and Relationship Managers who provide expert insights on global markets and specialist advice.