Faisal Sebaggala Lubwama Market Development Officer-IRA
According to the Uganda Bureau of Statistics (UBOS) National Labour Force Survey (2021), approximately 49% of Uganda’s working-age population is employed, translating to nearly 10 million individuals who rely on monthly salaries, daily profits or wages for their sustenance. In an environment characterized by increasing with financial volatility and socio-economic uncertainty, income from employment serves not merely as a monetary reward but a critical pillar supporting Individuals’ livelihoods, future aspirations, and household welfare. Despite its importance, this income is often vulnerable to a range of risks such as illness, accidents, or job loss that can significantly disrupt financial stability. Unfortunately, many salaried earners remain inadequately protected against such risks. Insurance, which should serve as a strategic risk mitigation tool, is frequently perceived as a discretionary expense. It competes for attention with immediate necessities such as rent, school fees, food, and transportation, making it difficult for many to appreciate its long-term value beyond its role as a safeguard against unforeseen contingencies.
In Uganda’s current economic landscape, many salaried individuals often overlook the strategic value of insurance, perceiving it as an added cost rather than a financial safeguard. However, contrary to common belief, insurance does not increase your financial burden, it significantly reduces it. When integrated into routine expenditures, insurance can serve as a financial lifesaver, cushioning individuals and households against unforeseen disruptions without overwhelming the monthly budget. To fully appreciate the role of insurance, it is essential to dispel prevalent myths surrounding it. A common misconception is that insurance is prohibitively expensive. In reality, managing crises without insurance such as through out-of-pocket spending can be far more financially draining. Medical emergencies, road accidents, loss of employment, or damage to property can wipe out years of savings in an instant. Insurance is, therefore, not a luxury but a vital financial instrument for anyone reliant on a fixed salary or variable income sources. We have heard arguments that if one had savings set aside, such savings can be sufficient to take care of the unexpected, forgetting that, savings should be used for investments instead of covering expenses during emergencies.
The Ugandan insurance market today offers a wide array of products tailored to diverse income levels and personal circumstances. This includes microinsurance solutions specifically designed for low-income earners and those with modest or irregular incomes. Such innovations ensure that even an average salary earner can afford meaningful coverage without significant financial strain.
It is almost inevitable to fall sick and when this happens, many often are not prepared to meet the hospital bills. By committing a small fraction of one’s monthly income towards a health insurance plan, individuals can avoid stress of unexpected medical bills and focus instead on recovery. Moreover, most health insurance products extend coverage to dependents, ensuring the broader family benefits from this protection.
If you have children, life assurance policies present another essential layer of security. Since school fees are an unavoidable part of your expenses, it is imperative for a parent to ensure that your child gets a quality and fulfilled education with or without you in the picture. So, with life assurance policies, you are certain that in case of an unfortunate event say permanent disability, or death, such policies ensure continuity in the education and welfare of their children. They offer a reliable mechanism for preserving long-term aspirations and shielding families from financial hardship.
Lately, access to insurance has also been significantly enhanced through digital platforms. With strategic partnerships between insurers and telecommunications companies, policyholders can now enrol, pay premiums, and make claims conveniently using their mobile phones hence bringing insurance closer to the people and reducing barriers to access.
For a typical Ugandan salary earner, insurance provides a structured approach to risk management. It helps to, protect valuable assets, prevents reliance on emergency borrowing, and sustains financial stability in times of crisis. It acts as a safety net, enabling individuals to keep the expenditure predictable while focusing on long-term economic advancement.
Protecting what matters to you should not be viewed as an unnecessary burden, but rather a strategic, deliberate, and forward-thinking step towards a more secure financial future. Insurance is not just a line item on a budget; it is a crucial component that often distinguishes between financial ruin and stability.
Therefore, the conversation about insurance being a safety net must change. A sudden loss of income can quickly spiral into financial distress yet insurance as safety net acts as a buffer, allowing you time and stability to recover while preserving your financial health.
It needs to start being seen as a necessity, especially for those relying on regular monthly incomes. Integrating insurance into your monthly financial plan is a proactive act of resilience which establishes a strong foundation upon which growth and stability are built, ensuring individuals and families thrive without the constant fear of disruption.
Creating a safety net is a journey that begins with awareness and a willingness to plan for the life’s uncertainties. Think about what would happen if your salary stopped today? How long would your current salary sustain your lifestyle, responsibilities and aspirations? Thus, your salary is not just a stream of income; it is a support for your identity, your family, and your future. Safeguarding it is not just prudent, it’s essential. Your salary deserves a safety net.
As the Insurance Regulatory Authority of Uganda, we are committed to promoting a stable, inclusive and transparent insurance sector. Our mandate is to protect policyholders’ interests while ensuring that insurance remains accessible and responsive to the evolving needs of Ugandans. Through this, we seek to empower every citizen with the tools to build financial resilience, navigate uncertainty with confidence, and secure a more predictable future.
The writer is a Market Development Officer at the Insurance Regulatory Authority of Uganda.
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