What is Life Insurance?

Life insurance is a contract between an insurance company and an insured (customer/ policy holder), where the policyholder pays the policy premium and the insurer promises to pay a sum of money to a beneficiary designated by the policyholder if the insured event (usually death) occurs. Depending on the type of policy one takes, events such as terminal or critical illness, death and disability can trigger payment.

Why should you have Life Insurance

Protection of the financial of your family. Goal Specific importance; such as children’s education, your children’s marriage, building your dream home, a relaxed retirement life or any other goal.            

What are the different types of Life Insurance?

The different types of life insurance are:

Protection Policies - these are designed to pay a benefit if the event that is insured against happens like Term Assurance; Benefit is payable on death within a term. e.g. Mortgages, loan Protection and Whole of life Assurance; Last expense: This policy is meant to cater for the funeral expenses of the policyholder or their loved ones.

Investment Policies - the main goal of these policies is to grow the capital put in by policyholders. Like Endowment: An endowment policy combines both protection and investments whose benefits including all the bonuses earned during the course of the policy is payable either on death within the term or at Maturity for goals like children education, buying a house etc.

What Is Group Life Insurance?

This is a life insurance cover that any group can undertake.

It is a key benefit that employers offer employees. It is usually issued in the name of the employer who usually pays the premium. As with other types of group benefits, group life insurance is generally cheaper compared to individual policies. SACCOs and investments groups also take group life insurance and members pay the premium.

What is covered under Group Life Assurance?

This policy is mainly taken out by the employer and it covers mainly death from any cause (natural, illness or accident) of the employee. Other optional benefits include permanent total disability cover, last expense cover and a critical illness cover.

What is a School Fees Insurance Policy?

This is essentially an endowment policy that combines both protection and investments. The insurance company will pay the full sum assured with bonus (which can be used for education of the beneficiary in the policy) if the policyholder dies within the period they are insured. If the policy holder survives and policy matures, the insurance company pays out maturity benefits including all the bonuses earned during the course of the policy which equally can be used for the same purposes.

What is Funeral Insurance?

This is an insurance policy used to pay for funeral expenses upon demise of the insured. It can be purchased as a stand-alone product or as part of life or general insurance. Funeral insurance is renewed annually.

Are people embracing it?

A number of people are embracing given the low amounts required to purchase this insurance, some providers have arrangements where premiums are paid periodically until death.

How is it effected?

Like any other insurance policy, the insured determines the type of package they desire and premiums are paid pegged on the benefits in the cover.  Premiums can be paid monthly, quarterly, half-yearly or annually depending on the agreement with the Insurer. Upon death of the insured, the insurance company pays the claim to the appointed beneficiary.

Packages from different funeral companies:

Life Plans - Cash payment on death.

Medical – Cash payment on hospitalization.

Funeral Insurance - Either payment of cash or provision of service.

What does it cover/benefits?

Upon death of the insured, the insurance company honors the claim by either paying cash to the appointed beneficiary or provides a burial service.

How does it work for Muslims?

The funeral insurance cover for Muslims provides a service for burial of a Muslim in conformity with the teachings and practices of the Islamic traditions