Welcome to Tamara’s Financial Planning & Consultancy. Today, we will delve into the world of insurance – an essential tool for managing financial risks. We’ll explore various types of insurance, how it differs from investments, and the specifics of education policies.

What is Insurance?

Insurance is a financial arrangement where you pay premiums to an insurance company in exchange for protection against potential financial losses. The insurer compensates you or your beneficiary if the insured event occurs, thereby protecting you, your family, and your assets from unexpected financial burdens.

Insurance vs. Investments

Insurance and investments serve different financial purposes. Here’s a comparative look:

• Insurance:
  • Purpose: Provides protection during the coverage period.
  • Risk Level: Lower risks as specified in the policy terms.
  • Tax Benefits: Offers tax relief on premiums paid.
• Investments:
  • Purpose: Aims to grow your money or assets with potential profits.
  • Risk Level: Subject to market risks.
  • Tax Implications: Generally, subject to withholding tax.

Types of Insurance

1. Life Insurance: Ensures that the insurer pays a sum of money to your beneficiaries in the event of your death.
2. Health Insurance: Covers routine and emergency medical care costs.
3. Homeowners Insurance: Protects your home and other property structures against natural disasters, unexpected damage, theft, and vandalism.
4. Motor Vehicle Insurance: Covers costs if you are injured or have caused injury/damage in a car accident. It also pays for repairs or replacement if your vehicle is stolen, vandalized, or damaged.
5. Travel Insurance: Covers costs and losses associated with traveling, including trip cancellations or delays, emergency healthcare, and damaged baggage, rental cars, and rental homes.

Education Policy (Super Education Plus)

An education insurance policy is a type of life insurance product designed as a savings tool to cover your children’s school fees. Payments are often structured to coincide with educational milestones, such as university entrance.

Purpose & Proposition

• Purpose: Provides annual income to cover education expenses for the nominated child/beneficiary.
• Proposition: Structured to pay at various educational levels, including primary, high school, and tertiary education.

Features & Benefits

1. Maturity Benefit:
   • 100% of the applicable sum assured is payable upon maturity.
2. Death Benefit:
   • Immediate death benefit of 50% of the applicable sum assured.
   • Accidental death benefit of 100% of the sum assured.
   • Waiver of premium on the death of the policyholder.
   • Cash payouts continue as scheduled.
3. Living Benefits:
   • Disability Benefit: Waiver of premium on the policyholder’s death.
   • Critical Illness: 50% of the applicable sum assured upon confirmation of listed critical illnesses.
   • Tax Relief: 15% of annual premiums.

Payout Schedule

• 15% of Sum Assured: 6 and 5 years prior to maturity.
• 20% of Sum Assured: 4 and 3 years prior to maturity.
• 30% of Sum Assured: 2 and 1 years prior to maturity.
• 100% of Sum Assured: Payable at maturity.

Onboarding Requirements

To apply for an education insurance policy, the following documents are required:

1. Passport (bio-data page and entry stamp page).
2. Work permit, diplomatic card, residential permit, driver’s license, or utility bill.
3. Notaries/public stamp on all required documents.
4. KRA Pin letter.
5. Duly filled and signed application form and original bank direct debit form.
6. First month premium payment (via Mpesa or banker’s cheque).

Alternative Documents

• National ID or Alien ID
• Passport page stamped on exit

Premium Payment

• First Month’s Premium:
  • Paybill: 541400
  • Account: NEW
• Monthly Premium:
  • Deducted from your bank (specific date)
  • Pay via Mpesa (policy number-account number)

Policy Document

The policy document is sent to the client two weeks after issuance via email.