Veteran actor David Dontoh, who was among the advocates selected to lead the annuity campaign, urged people in the creative industry to take advantage of the product to save for a “rainy day”.
According to him, he thinks annuities would serve as a financial management tool for those in the creative sector when they retire from active duty.
He made the remarks when the National Insurance Commission (NIC), as part of efforts to deepen the annuity market in the country, began a series of engagements aimed at educating the public about annuities.
An annuity is a contract between a person, usually a retiree, and an insurance company whereby the insurer agrees to make periodic payments to the owner of the product, primarily beginning at retirement.
An individual purchases an annuity in a single payment or in a series of payments called premiums.
In his interaction with some key players in the media and entertainment industry who have been selected to lead the advocacy, Insurance Commissioner Dr Justice Ofori said that most annuity deals offer a way to earn money while retired.
He said it was therefore necessary for every individual to subscribe to an annuity product, as it guarantees a stress-free life in retirement.
This, he said, would help the individual maintain a decent lifestyle and lessen the impact of the rising cost of living that characterizes retirement.
“This is an area that is largely unknown or misunderstood by many people, especially in our part of the world.
“The campaign we intend to undertake with you as our spearhead is therefore to raise awareness among the general public of the need to include protected lifetime income solutions such as annuities in a comprehensive retirement plan,” said said Dr. Ofori.
Other defenders included Gyedu Blay Ambulley, Oheneyere Gifty Anti, Nana Yaa Konadu, Abeiku Aggrey (Santana) and Nana Adwoa Awindor. Others are Saddick Adams, Reggie Rockstone, Stephen Tetteh Charway and Alhaji Salifu Abdul-Daim!
Some of them lamented the situation where many people in the creative industry have the idea that they can earn royalties on their works even when they are no more.
“And that’s why a lot of our creatives in their old age look pitiful. It’s because they didn’t have insurance arrangements that helped them plan for a safe and reliable future,” he said. said one of the defenders.
They were excited that the annuity, as it was described, would therefore greatly help creatives save for a rainy day when they need to be more active.
Dr Ofori said the development of the annuity market was part of the NIC’s efforts to exploit the synergies of the pension market.
He said the Commission had started taking these steps, bearing in mind Tier 2 and Tier 3 lump sums, which are available to those eligible to retire under the new pension system.
“As the stakeholder consultations have concluded significantly, the NIC has already published the requirements that life insurance companies wishing to underwrite annuities must meet.
“Our collaborations with GIZ to run capacity building workshops on designing and selling annuities had since ended, hence our presence here today,” he said.
Constant income guarantee
In an interview with the media, Dr Ofori said that the NIC realized that many people after retirement were struggling to survive after receiving their lump sums from the tier 2 pension scheme and were therefore forced to rely only on monthly payments. from their social security contributions, which mainly requires some support from their own financial arrangement, such as annuities.
He said that the annuity was therefore a guarantee of constant income throughout an individual’s life.
“Instead of taking your capital and not knowing how to manage it, it’s good to give it to a life insurance company that can manage the funds and guarantee you a monthly income for the rest of your life,” said he declared.
He also assured the public that there were regulations to ensure that these sums were invested in secure investments so that there was no risk of losing money.
“Annuities have strict guidelines which we always enforce and no company is allowed to sell annuities.
“Before you are allowed to do so, you must submit to proper scrutiny so that we are satisfied that the future of those placed in your hands will be well protected,” he said.
Plan your retirement
“Everything you do in your early years as a creative, you get a lot of engagements, but as you get older the engagements dwindle to such an extent that you can only do one production per year. Are you going to live on this production alone?
“That’s why it’s necessary for all of us to see this as something timely to prepare for our future,” he said.
Living on annuities
Popular radio presenter Abeiku Santana also said that while annuities are very popular in developed countries, the situation is different in this part of the world.
He said the NIC’s decision to publicize this product was a step in the right direction as it would help people retire peacefully and live off their pensions.
“We should also demystify this notion that insurance annuity is for the formal public sector. People in the private and informal sectors must also take a keen interest in it.
“A lot of people in the creative art industry when they get older they go out to solicit funds to meet their needs, but in their heyday if they knew about this product they would have embraced it, it’s so important that we make noise about this product,” he added.