"Yes, hello. I would like to buy some alien insurance, please." It turns out that this was not a prank phone call as the caller informed me that alien insurance is quite real, although he was not actually interested in purchasing any at the moment.
Some 30,000 policies have been sold - mostly in the UK and USA - to insure people's lives, health and property against the perils of alien abduction through brokers such as the St. Lawrence Agency in Florida and GRIP in the UK, because for people like Shirley Maclaine, it is a real concern. But what exactly is the risk? The burden of proof rests with the insured to prove that they have been abducted and returned back to earth and some of these cheap benefit policies have actually paid claims.
The brokers who sell the insurance admit that it is more of a publicity stunt and an attempt to inject some humor into the industry, but the $6 million earnings of GRIP Insurance in the UK during the 1990s X-Files obsession is real. Simon Burgess, the founder of the now defunct GRIP donated the premiums for his obscure risks such as millennial virgin births and Loch Ness monster attacks to charity, but there are still many insurance practices where sellers are profiteering from the uninformed user.
For example, a travel policy may be beneficial to someone who has no insurance whatsoever, but for the homeowner who already has contents insurance, life insurance and a medical policy, a travel insurance policy is superfluous. The aforementioned policies will already include some aspects of temporary worldwide cover and if not, most policies can be easily extended to do so for a much smaller premium than a standalone travel policy. Furthermore, many credit card companies also include similar insurance cover at no additional cost.
In the UK, many electronic retailers will try to sell an extended warranty along with the product but if the item is made by a reputable company a malfunction is unlikely and even so, there are consumer protection laws designed to protect purchasers in the event that a product is defective or not fit for its purpose. Likewise, many cell phone service providers may offer insurance on a new cell phone which can increase the contract price up to 50 percent, however, you can just add your new phone to your homeowner's cover for a fraction of the price. Luckily, these predatory practices are all but unheard of in The Bahamas.
Some people also choose to take life insurance out on their children even though they don't have dependents or a mortgage to protect. Children will be better served by a savings fund for their education at best or funeral expenses at worst.
The types of insurance that you should have is to simply protect the things that matter most:
1.) Homeowners insurance not only protects the physical structure of your biggest lifetime purchase, but the policy will also provide a place for you and your family to live temporarily while the home is being repaired should a loss occur. Also included is personal and public liability cover.
2.) Motor Insurance: Not only because it is required by law, but the purchase of a new car is outside of the scope of most people's cash reserves.
3.) Health insurance protects against the soaring cost of medical care although only about 10 percent of the Bahamian population have a private health insurance policy of some sort.
4.) Life insurance protects the interests of the people who depend on you financially. Make sure you read your mortgage contract carefully: although the bank may strongly encourage you to buy life insurance, it may not be a mandatory part of your contract. If you have no dependents, life insurance may not be necessary.
5.) Long term disability insurance protects your greatest asset of all: your ability to earn a living. The thought is so scary that most people don't even want to think about being permanently disabled and unable to provide for themselves. A common misconception is that National Insurance will take care of you, but even if you qualify, the payments are low and take a very long time to materialize.
The key is to read you policies carefully to make sure that your are not duplicating insurance cover or buying unnecessary cover from a third party vendor.
o Stephanie Cleare is a fully licensed and qualified account executive at Tavares & Higgs Insurance with 12 years experience in the Bahamian insurance industry. Email her at scleare@tavareshiggs.com.
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