HEALTH INSURANCE AND YOU!

As human beings, we are faced with risks of illnesses, injuries and even death on a daily basis. Although many of us believe that we will never fall prey to any of such risks. However, we need to be open to the idea that medical emergencies such as accidents or other health complications can and do arise anytime. The price of falling ill or having an injury can be quite huge and includes amongst others:

•         Unbudgeted payment of huge medical expenditures in clinics and hospitals

•         Loss of income because we cannot work

•         Emotional problems – we lose our peace of mind

The availability of ways to reduce the losses (productivity, income, peace etc) we may suffer is thus an absolute necessity.

OPTIONS/POSSIBLE CONSEQUENCES.

•         Dip in your savings

Postpone or forgo our other plans and dreams – Houses, cars, holidays, schooling etc

•         Borrow money

Lose your dignity and maybe go into poverty

•         Do nothing

Pray and hope for the best.

It is now almost common practice all over the world to reduce or mitigate these losses through health insurance.

What is Health Insurance? 

Health insurance is a way of paying for some or all of the costs of health care. It protects insured persons from paying high treatment costs in the event of sickness. In most developed and some developing countries, health insurance is used as a means of ensuring that almost all citizens of a nation have access to affordable and quality health services.

How does health insurance work?

A health insurance company elects to collect relatively small sums of money called premium from several individuals. Because not everyone in that particular group falls ill at the same time, the unfortunate few that do fall ill are treated from a well-managed pool of funds. Health insurance thus makes it possible for individuals to enjoy relatively huge amounts of financial and medical benefits for very little capital outlay. Some health insurance companies also undertake to oversee the quality, necessity, appropriateness and accessibility of the medical care that is provided by the health facility. 

Benefits of having health insurance

For the individual, family or group:

•         Availability of funds to pay for health services at anytime

•         Cashless access to large numbers of quality hospitals

•         Good health

•         Job security

•         Peace of mind

For companies

•         Reduced health care expenditure on employees

•         Ability to budget for unforeseen and unpredictable medical expenditures

•         Hedge against the ever rising cost of health services

•         Enhanced staff productivity and satisfaction and

•         Increased return on investment.

WAYS TO TRANSFER MONEY AT LOW COST

In this computer age, transferring money by cash, cheque, bank draft or other traditional means seems going outdated. These methods may appear less popular where there are faster electronic methods for transferring money between accounts, states and countries; that doesn’t mean that they are not still viable options. There are inexpensive options for transferring money. Below are ways to transfer fund at low cost.

·         Your bank: If you are transferring money from one account to another within the same bank, this is something you can easily do at your bank for free. If you are transferring fund from your account to another account in a different financial institution, you will need the account number and the bank you would like to send money to. Overseas money transfers are possible through your bank as well.

·         E-Transfers: Some financial institutions allow you to transfer fund online to another individual, similar to the way you would if you were paying a bill online. The services require the account number and bank routing number. E-transfers are often less expensive than transfers that are done through a bank teller.

·         Western union or MoneyGram: Western union or MoneyGram provide similar services that allow you to transfer fund to different city, state or country. They charge a flat rate for the transfer that is based on the speed of the transfer, the location that you are sending the money to and the amount of money you are sending. If you are doing international transfer, you will also be charged an exchange rate.

·         Cash: It may be considered the ‘old fashioned way’ when it comes to transferring money, this option is practical. Where time is not the most important consideration, simply withdrawing cash and physically bringing it to another bank to deposit into an account is completely free.

·         Cheque: Writing a cheque and depositing it into another account, handing over to another person or sending it by mail to an individual in a different city or state is another affordable choice, especially if the bank offer free cheque system.

·         Bank draft: This method for money transfer is a great choice.  You can purchase draft to be paid to someone else. This method is safe and cheap.

·         E-mail money transfers: This is practice mostly in foreign countries; some financial institutions offer an email fund transfer service. This form of money transfer functions like an electronic cheque. The fund is not physically transferred by email, though the transaction is initiated by email and the recipient is notified by email that the fund are available. You don’t require the recipient’s bank account number, though a security question is generally required to identify recipient before he can collect the money.

UNDERSTANDING DORMANT OR INACTIVE ACCOUNT

Mr. Ojo opened account in XZX bank and operated it for few years before he travelled to United State of America for greener pasture. After many years he came to see his family in Nigeria. He needs to open account for financial transactions. He went to XZX bank. On entering the banking hall, one of the bank staff recognized him and quickly ushered him to Customer service’s table. Mr. Ojo said he used to have an account with the bank before he travelled oversea. It is more than five year now, ‘is it possible for me to operate the account?’ Yes, answered the Bank Officer. Your account has been classified as DORMANT but you can still reactivate it. With this information; Mr. Ojo did all the processing for his account reactivation and he was able to access the account within 24 hours.

With above scenario, Most of us have savings accounts. At times we end up having many bank accounts. It is not easy to keep track of multiple savings accounts, in fact it breeds confusion. Ignoring a bank account for a long period can cost you time, money or both. In this write up I explain the meaning of Inactive and Dormant account, why banks make them dormant and process of reactivating them.

What is Dormant or inactive accounts? These can be described as those accounts that have witnessed no transactions for months or few years. The process of identifying dormant or inactive accounts has been programmed into the computer, which automatically identifies the account and blocks it accordingly.

How can you prevent account from becoming inactive or dormant? Keep using your account before becoming inactive or dormant. Carry out transactions in the account once a while. If the account is no longer useful, best is to close it.

Why does the bank make account inactive or dormant? The banks make account dormant or inactive to safeguard your money from any risk of fraudulent transactions by dubious bank employees. For safety purpose, banks group such accounts into single pool and maintain detail of inactive account in a separate ledger.

Is making account dormant same as freezing it? No. freezing of a bank account means there will be no transaction in the account until further notice. All payment will be stopped even in case of cheques issued earlier by account holder. However, any deposit already in the pipeline can be credited. Regulator or courts have right to order a freeze on bank accounts. You must have a favourable court verdict in order to unfreeze your bank account.

What happen when account becomes inactive or dormant? You can’t perform several operations. In case of inactive account, you cannot request that a cheque book be issued. Once account turns dormant, the number of restrictions increases even further. You can’t do any transaction or make any request on the account again.

What about interest on the bank account? Even after your account turns inactive or dormant, interest is still credited to saving account regularly.

Does bank inform customer on making account dormant? Normally, the bank will inform the customer two or three months prior to account becoming inoperative. If still no action, the bank will declare the account inactive and notify you.

Process of reactivating Dormant or Inactive accounts.

The actual process of reactivation may vary from bank to bank. Below is the normal process of reactivating inactive or dormant account.

§  To reactivate dormant account, the customer concern must identify himself/herself properly and write a letter demanding for reactivation of account. This should be confirmed with bank’s record.

§  Give satisfactory reason for allowing the account to be dormant.

§  The bank customer service officer retrieves the account opening form.

§  The customer completes a fresh set of mandate form; both signature and address.

§  The customer is then allowed to pay into the account after the blocking has been removed.

The bank will debit the customer’s account with the reactivation charge.