Life insurance is a long-term contract between an individual (policy holder) or organisation and an insurance company.
The insured pays the premium and the insurer promises to pay a sum of money to an appointed beneficiary when the insured event occurs. Insured events that trigger payment from the life insurance cover include death, critical illness, terminal illness, temporary or permanent disability. Other expenses such as funeral expenses may also be covered. Read the contents of your life insurance policy to know what is covered.
Life insurance can either be for an individual or it can be taken out for a group of people such as employees, a chama, a SACCO, or a large extended family. The policy document in the case of a group will bear the name of the group as the entity that is paying the premium. Group life is generally more affordable compared to individual policies.
There are three broad types of Life Insurance Covers:
Travel Insurance covers specific events during the course of travel. Covered risks and exclusions vary significantly by policy type, insurer, and travel preferences.
The risks typically covered include:
The risks typically not covered include:
This policy insures the home. It is also referred to as Domestic Package insurance. It combines coverage for the home that is, the building and household contents as well as domestic workers against death or injury while in the course of employment. The policy also covers the homeowners or occupiers against lawsuits for injury or property damage caused to other people (third parties).
Home insurance can be taken out by a tenant, a homeowner or a landlord.
What does home insurance cover?
Home insurance policy has five (5) sections, A to E, each covering different risks as broken down below:
You can choose which of the sections you wish to take up depending on whether you are a tenant, living in your own home, or are a landlord.
Can I purchase home insurance if I am renting a house?
Yes. You can purchase home insurance as a tenant for the content in the home, items you move outside with, and liabilities for domestic workers and third parties.
Why is it important to take an inventory before purchasing Home Insurance?
Before you purchase home insurance, you will be required to provide an inventory. A home inventory is a list of all the things in your house including electronics, furniture, kitchen equipment, and jewelry. It is important to record the serial numbers of the major appliances and keep the receipts and user manuals safe.
Having an up-to-date home inventory will help you ensure the correct value of your property and get your insurance claim settled faster.
How often should I review my policy?
Home insurance is an annual cover. However, if in the course of the year you make improvements to your home such as fire and burglar alarm systems, upgraded plumbing or electrical system or if you make a major purchase. Inform your insurance company about the improvements or changes.
You may need additional cover if there is a change in the value of your home or its contents.
A pension is a form of insurance that helps one plan for life after retirement and protects against age-old poverty.
The pension can be defined as a regular payment to an individual during retirement from a pension scheme towards which that individual or their employer had contributed during their working life.
Why should I plan for retirement?
You may be young and energetic today, but with time, you will slow down and retire and thanks to advances in medicine, we now live longer.
Living expenses however do not retire. You will still need to eat, go to the hospital, pay for utilities (water, electricity, cooking gas), medical bills, housing, and others.
Planning for retirement helps us have an income that will cater to these expenses and ensure that the quality of life in old age is still as good as when one was active.
How do I save for retirement?
There are structured ways of planning for retirement as explained below:
What are the benefits of joining a pension scheme?
What happens when I retire?
If it’s a pension scheme, you are allowed to take 1/3rd of the total pension fund as cash at the time of retirement. The remaining 2/3rds of the fund is converted into a monthly pension which is paid to you at the end of every month. For the rest of your life.
If it is a provident scheme, then the entire fund (subject to applicable taxes) is paid to you as a lump sum upon retirement.
Planning for retirement is also important given today’s economic realities where it will be difficult to rely on other people for your daily needs. The family unit is weakening and the traditional notion of parents relying on their children is fading.