Tamara, I have a number of Investments and savings in the Banks, SACCOs and Properties. I don’t need insurance. I’m sorted. Why Insurance by the way?

I met Mr. Antony Bosco (not his real name) back in 2016. He was a Medical doctor in a Government hospital in Nairobi Kenya and he also had a clinic in the city managed by his wife who was also a Medical Doctor. By year 2017, Antony got an opportunity to start a Dental Clinic in New Jersey in the USA- so he went there and started up the clinic which grew very first. Back in Kenya, the clinic went well. Antony and his wife were blessed with 3 children, age 1yr, 3yrs and 5years respectively.

At Age 38yrs and 37yrs, Antony’s family was relatively wealthy and living a middle-class life. Mr. Bosco was considered a successful Medical Doctor and very promising.

We talked about Insurance, Investments and retirement planning. I tried to convince him of the importance of having life insurance. He opted for the Profession Indemnity for him and his wife. Bought a 3^rd party car insurance and got travel insurance in various occasions as he traveled a lot. What he didn’t consider buying was education policies for his children as he considered it a waste of time since he had money in the bank, Sacco savings and some properties plus the clinics -He was okay.

The first son of the family was in Pre-primary school in a group of schools where he was paying close to Kshs. 170,000/= per term. The other two were still at home.

We kept communicating and conversing online as I tried to convince him to secure education plans for the children. This took quite some time. In February 2019, I managed to win him into buying education policy for his first-born sons’ Senior school the rest said he’s still thinking. I sent him the application and quotation details and we agreed that he was to send everything in 3 days’ time online and to make the first premium payment as well through the Company’s Mpesa Business number. So, on the 3^rd day he didn’t communicate and I called him on the 4th day to follow up. He then stated that his wife had visited and they plan to come to Kenya in 2 weeks’ time and so they’ll do everything while in Kenya plus he wants the 3 of us to meet face to face for sign up – this sounded okay. So, they were to arrive in Nairobi at the end of the first week of March and we planned to meet on Tuesday 12^th or Wednesday 13^th of March (to confirm on arrival).

On Sunday 10^th March 2019 the unfortunate event involving the Ethiopian Airlines Flight 302, a Boeing 737 MAX Crashed. Mr. Bosco and his wife were on board! The worst-case Scenario happened. The education policy was not bought, the 3 children were left orphaned with no education will.

Later the clinic was sold by Bosco’s brother who was a drunkard. I’m not sure if the Kids are okay, I’m not sure if they are in school. All I know is that they would be fine if the Dad could have bought them education policies because no one would have taken that from them.

Why Life Insurance? In my years as a Financial Advisor, I’ve worked with many people recommending life insurance to them. Life insurance is a pillar of a good financial plan and without it, your financial plan may fall apart in the event of untimely death. Those with dependents, dangerous jobs and joint financial obligations are among the types of people who should have life insurance.

Do you have an insurance cover and have you   ever   wondered whether it is a necessity? And if so, do you understand what you are covered for?  Do you understand what insurance is? How much Interest percentage will you get? The simple answer to the above questions are:

1. a)   Yes, you need an insurance cover like yesterday. It is very Necessary.
2. b)   You   need to   know and understand what it is that you are covered for.
3. c)   You need to understand the needs and benefits of insurance so as to make an informed decision and purchase a cover. Lastly, Consider assurance benefits more than monetary benefits when buying an insurance cover.

Insurance operates on the basis that losses and misfortunes can occur anytime. It is informed by the wisdom that it is better to plan for a  rainy day  so  as  to  reduce or manage the impact of a loss,  should it occur. There are   also   various religious teachings that underscore the importance of insurance as a financial planning mitigation tool.

In the traditional Kenyan societal set  up, insurance was  also  practiced (and continues to be practiced in some areas) by pooling resources to help those in need. This practice, however, is not sustainable in the current life hence the need for individuals to  purchase insurance covers.

You need insurance because losses   and misfortunes occur from time to time. In most cases when incidents such as fires, sicknesses, motor accidents and death occur, you are not prepared for the financial consequences that follow. We see cases where people resort to harambees or  borrow money from friends and  relatives who unfortunately,  (in most cases) are often short of money and therefore do   not  help  much.  In extreme cases, we see  cases of  families disposing off  assets at throw away prices because of the emergency situation. It is even sad  when such assets are sold to  pay  for  medical bills  and the patient whose bills  need to  be  paid dies. No  doubt this is double tragedy. And  while insurance will   not  stop such deaths  or   losses  from occurring,  or   people  holding  harambees, it  definitely helps cushion those who have suffered losses by availing funds to cover for the insured losses.

Life has a lot  of  uncertainties. By buying insurance, you transfer possible financial losses from yourself to an insurance company. While   you   cannot  avoid   the   misfortunes of life, you  can  be  sure  that  with  the  right insurance policy,  you will recover from  your financial loss.  So as  to  fully  appreciate the importance of insurance and  purchase the right  insurance cover  for yourself, you  may need to:

1. Identify your  risks  and  needs and prioritize them. Remember that  not  all risks are   insurable  and   your   insurance  needs are  specific  to  you.  You should not buy  an insurance product simply because your friend bought a similar product and it sounds good. The cover your friend has may not be the one you need. E.g. Mr. Bosco needed education cover for his children, you may be single and in a dangerous job thus requires you to have a personal accident cover.
2. Discuss your risks  and needs with an insurance company or a broker or an agent near you.   Always   compare policy benefits vis-à-vis premiums of several insurance companies before you  settle on  one. Insurance intermediaries  (Brokers  and   Agents)  are like  Doctors who diagnose and prescribe medication for  their patients in  that  they should help you  identify that area in  which you  are  hugely exposed and advice the right insurance product for you!
3. Match   the   available   insurance products to  your needs and choose the one that best meets your needs at affordable cost. When  you match your needs with the policy, it is highly unlikely that you  will  cancel the policy before it matures. This  is because you will  have understood it  and known exactly that which you  are  getting into. Once again remember to  purchase only that cover that you need, based on your risk assessment and prioritization. Where possible avoid instances of buying more or less than you need.

Peace of mind. Perhaps the most significant benefits of insurance include protection of  family and assets and the resultant peace of mind that one has when they have an insurance policy. There are   also   other benefits like savings, financial security, investment vehicles and tax relief.

Lastly, remember that your health is your wealth- sicknesses strike without notice; take  charge  of   your health  and  consider buying a medical insurance cover. The future belongs to the educated-with education becoming increasingly expensive; consider buying a policy for your children’s education. Accidents occur anytime, anywhere-consider purchasing a personal accident cover against disabilities and   deaths resulting from accidents (even those from accidental stair case falls).

Insurance is not an investment, Insurance is not comparable to Bank/Sacco savings. Insurance is Assurance and that’s exactly what you require.

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