This archive report was first published on 24 July 2019.
According to Mr. James Macharia, Chief Operating Officer of Kenindia Assurance, insurance covers are designed to provide a safety net for individuals against unexpected events. He notes that despite the benefits of insurance, the penetration rate in Kenya remains below 3 percent.
The main reason for this low penetration rate is the lack of public awareness about the importance of insurance. Many Kenyans still cling to cultural beliefs that taking up insurance is a sign of bad luck, leaving them without vital protection such as life insurance or income protection.
Life insurance policies not only provide financial protection to loved ones but also offer great avenues for goal-based savings and long-term investment objectives. Mr. Macharia affirms that many Kenyans are thrown into financial oblivion when they lose their jobs without a plan to pay their rent or school fees, highlighting the need for income protection.
Income protection is crucial, especially for the self-employed, whose income is directly affected by the number of days or hours they spend at work. This ensures that they maintain their income when occurrences such as sicknesses arise.
Mr. Macharia urges the public to secure their future and those of their families by considering taking up insurance covers. He notes that claims in regards to income protection can be complicated to assess, but the benefits of insurance far outweigh the costs.
Insurance covers come handy in the event of an illness that leaves you bedridden, as the insured can be paid a replacement income until they are fit enough to continue with their work. The premiums are paid according to the terms of agreement, and the benefits can be realized much sooner, relieving the financial burden from family members.
Mr. Macharia advises that life insurance policies should only be bought when the policyholder is certain of a steady income flow, which can help them pay their premiums regularly. He recommends a longer policy period for a better overall benefit.
