Life Assurance In Kenya: What You Need to Know

One of the biggest challenges that I have come across as an insurance agent in Kenya is that clients really feel lost when it comes to understanding what life insurance is all about. It comes out that most people feel frustrated since they do not understand the terms and conditions that are generally attached to life assurance policies. 

Life assurance policies can be categorized into three major classes:

1. Whole Life Assurance
2. Endowment Assurance
3. Term Life Assurance.

The major ones that are commonly issued in Kenya are the whole life and endowment plans for individuals.

The difference 

The difference between the whole life and endowment plans are as below

1. Whole life will only benefit your next of kin or dependants hence it pays only upon death.
2. Endowment plans can either benefit you directly through the maturity of the policy or your next of kin/dependant in the event of your death.
3. The endowment plans can have options of what is called partial maturity that's is to mean, the insurance company can have the option where the company can send you a certain percentage of the sum assured at the end of the say every 3, 4 or 5 years. This will vary from company to company.
4. Depending on the kind of whole life policy picked, you pay premiums until death or until 65 years and your cover remains in force until death. This varies from insurance company to another.
5. The endowment plans are more expensive compared to the whole life plans

Benefits of life Assurance in Kenya

1. This is an avenue of saving and teaches you the discipline of saving.
2. This can be used as a way to build an estate for yourself and dependents.
3. You get tax relief of 15% and this relief is capped at KES. 5,000 a month.
4. You can use your life assurance policy as loan collateral or even get a loan from the insurance company.