03 Dec Life Insurance Policy in Kenya: Types, Benefits and Cost
What comes to your mind when you hear about life insurance in Kenya? Probably, death comes to your mind.
Have you ever thought of preparing for your death? According to our African culture we are forbidden to talk about the bad omen; death.
Culture is a good thing but we are living in different times, where we experience financial constraints when fundraising for funeral expenses and other costs that comes with it.
You have heard of cases where bodies stuck in morgues because the family members have unpaid bills to clear with the hospital.
There are some cases where family members borrow money from banks or shy locks to cover funeral expenses. While others use Title Deeds as collateral to get their dead discharged from the mortuary.
But the good news is, Kenya Life Insurance Companies are attempting to cut through the myths about death presented by our culture and how income levels to offer life insurance.
Many of us shun away from the discussion concerning death, unfortunately we can’t escape the discussion on funeral insurance.
What Is Life Insurance Kenya?
Life Insurance provides a safety financial umbrella to your immediate family members in the event of your untimely demise.
When you take up the life insurance policy in kenya, you pay monthly contributions for a certain period of time. In the event of your death, the money is paid out to your immediate family members or the person you have named as the beneficiary in the insurance policy document.
Note that, when you live past the maturity date of your life insurance policy, the returns that the policy has accrued over the years will be given to you by your preferred insurance provider.
It is important to know that, life insurance is not only pegged to your life, it also compensates where inevitable financial consequences that comes with the loss of life.
Life insurance covers;
- Funeral expenses
- Final expenses
- Outstanding debts and mortgages
- Planned educational expenses
- Lost income
Life insurance does not cover;
- When death is a result of suicide
- The life insurance policyholder was murdered by their immediate family member/beneficiary
- The death was a result of criminal activity
- The cause of the death was excluded
- The Terminologies in Life Insurance
Do you understand the terminologies used in life insurance? Here are some of the life insurance terminologies for you to comprehend;
Insured; The individual’s life covered by the policy.
Sum insured/assured; The amount of life insurance coverage you have purchased from an insurance provider.
Policy Term; The stipulated time of the policy you have taken.
Premium; This is the amount you pay periodically to the insurance provider, to keep the policy in force. Payments can be done on monthly basis, quarterly, semi-annually or annually.
The Life Coverage Policy Document; This is the physical document that contains the terms and conditions and the details of the contract between you as a policyholder and the insurance company.
Partial Maturity; There are types of insurance policies, where you are paid before the end of the policy term.
Beneficiary; The person whom you have named in the policy contract to receive the benefit upon your demise.
Bonuses; There are types of life insurance policies, where upon maturity of the policy, bonuses accrued from the insurance policies are paid out.
Surrender value; After a successful payment of the premium for at least 3 years, you can surrender the policy to the insurance provider and receive this value when you can no longer afford to pay the premium or you are no longer interested in the policy.
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Life Insurance Policy Kenya Types
Here are the types of life insurance policy offered in Kenya;
Endowment Policy. This policy offers you dual benefits, in the event of your death, the money will be paid to your beneficiaries. However, when you live beyond the stipulated time period in the policy, the life insurance provider will refund you the premiums together with any capital gains and bonuses accrued within the period.
The Term Life Policy. When you take this type of life insurance policy, you pay a certain premium for the stipulated number of years. In the event of your demise, your beneficiaries will receive the life insurance benefits.
Whole Life Policy. Unlike the term life policy, this type of policy does not have a timeline attached to it. As a policyholder, you will continue enjoying the benefits of this policy until in the event of your demise. Note that, there is no risk of losing premiums paid in this policy.
Money Back Policy. When you take this type of life insurance policy, your beneficiaries will receive periodic payment of the sum to be paid out in the event of your death. In cases where death occurred within the policy, your beneficiaries will receive the full sum insured.
Life Insurance Policy Benefits / Cost Of Life Insurance in Kenya
Why should you consider taking up life insurance policy? Here are benefits of funeral insurance;
- It clears your debt
- It caters for your funeral expenses
- It covers the educational expenses for your children
- Unpaid income is adequately made up for
- It is also a channel for you to receive annuities or pensions even after retirement.
The cost of the life insurance will depend on the following factors;
- Your age
- Your general health status
- The total coverage needed
What Is Considered When Taking Life Insurance In Kenya?
Here are factors that the insurance providers look at when you are applying for life insurance;
- Your level of income
- Your gender
- Your age. Some insurance companies cover individuals who are at the age of 60 and above.
- Your medical history, you will be required to go for medical check up in order to have the life insurance policy.
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Are you considering getting a life insurance policy?
Here are few questions to ask yourself before applying for life insurance coverage plan;
- Do you have dependants?
- Do you have assets?
- Would the future of your dependants be secure in the event of your demise?
- Do you have an interest in a forced saving scheme to fund school fees, retirement or anything you desire?
- If you answer, yes to all this questions, you should consider purchasing a life insurance.
- Are you in need of a life insurance policy? Do you want your dependants to be covered upon your demise?
Get life insurance quotes in Kenya at Insure Afrika, we will only require you to fill the following details on our website; Your first and last name, your email address and your mobile number.