This archive report was first published on 5 August 2019.
Life Insurance in Kenya: A Guide ¶
As of 2019, insurance penetration in Kenya stood at 2.7 percent, with life insurance accounting for 1.8 percent of this figure.
The low uptake of life insurance in Kenya is largely attributed to a lack of awareness about its benefits.
Many people associate life insurance with death, leading to a fear of planning for the end. However, life insurance is designed to alleviate financial troubles upon one's untimely demise.
When a loved one passes away, relatives often struggle to cover funeral expenses and outstanding medical bills. Life insurance can help mitigate this financial burden.
By taking out a life insurance policy, individuals can ensure that their immediate family members or beneficiaries receive a lump sum payment in the event of their death.
Life insurance policies in Kenya typically cover final journey expenses, outstanding debts and mortgages, planned educational expenses, and lost income.
However, certain exclusions apply, including death resulting from suicide, murder by an immediate family member or beneficiary, or death resulting from criminal activity.
There are various types of life insurance policies available in the market, including endowment policies, term life policies, whole life policies, and money back policies.
Each type of policy offers unique benefits and features, and individuals should carefully consider their options before making a decision.
Additionally, the Insurance Act indicates that a policy attains a surrender value after at least three years of continuous payment of premiums.
One of the benefits of having a life insurance policy in Kenya is the tax relief it provides. Individuals can claim a tax relief of 15% of the premium, subject to a maximum of Ksh. 5,000 per month or Ksh. 60,000 per year.
