Insurance penetration in Kenya stands at 2.7 percent with that of life insurance at 1. 8 percent.
The low uptake is largely attributed to lack of awareness.
Matters life insurance especially in Kenya are associated with death thus people fear to plan for the end.
When loved ones die, relatives put together funds they have to foot funeral expenses, clear medical bills.
For some cases bodies are stuck in morgues because of unpaid bills.
Life insurance is structured in a way that it alleviates financial troubles upon ones 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.
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.
Final journey expenses, outstanding debts and mortgages, planned educational expenses and lost income.
It however does not cover death as a result of suicide, the life insurance policyholder was murdered by their immediate family member or beneficiary, death resulting from criminal activity as well as when cause of death is excluded such as in cases of hazardous hobbies.
There are different types of life policies available in the market.
The Endowment Policy offers dual benefits where upon death, your beneficiaries will be paid.
However when you live beyond the stipulated period in the policy, the insurance provider refunds the premiums together with any capital gains and bonuses accrued within the period.
When you take the Term Life 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.
The Whole Life Policy does not have a timeline attached to it.
There is no risk of losing premiums paid in this policy. With the Money Back 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.
If you are unable to pay your premiums, The policy may lapse and you may not be entitled to any benefits unless the policy had attained a surrender value.
Insurance Act indicates that a policy attains a surrender value after at least three years of continuous payment of premiums.
There is a tax upside to having a Life insurance.
One receives a tax relief of 15% of the premium subject upto a maximum of Ksh. 5,000 per month or Ksh. 60,000 per year.