Who gets insurance? a Zambian innovation
Winter, J.
Aids Analysis Africa 7(5): 8
1997
ISSN/ISBN: 1016-8974 PMID: 12293011 Document Number: 270583
In conventional pension schemes, the total worth of an employee's regular contributions made throughout his or her working life is paid out during retirement on the basis of average life expectancy. In Zimbabwe, life expectancy is 66 years and an estimated 500 people die from AIDS per week. AIDS morbidity can force people to retire early from work and considerably reduce life expectancy. Therefore, a 45-year-old employee with AIDS who retires and is expected to live only an additional 5 years will not receive the full value of his pension during retirement because the lump sum will be divided and paid into 21 equal parts rather than 5. To meet the needs of such people with serious medical impairments which significantly reduce their life expectancy and force them to retire early from work, Fidelity Life developed and launched its Enhanced Annuity policy. In Fidelity's new pension scheme, medical experts estimate the number of years a patient is expected to survive, then use that figure to calculate the annuity the person will receive. To qualify, a person must be very ill and have a lump sum of Z$25,000 (US$2100) either through pension contributions or savings.