Life Insurance in Kenya

Life insurance is a contract in which you pay premiums and the insurer pays a lump sum to the people you name if you die while the policy is in force. Some plans also pay on permanent disability or a critical illness. In Kenya it is sold by life (long-term) insurers licensed by the Insurance Regulatory Authority.

Each policy lists its own exclusions. The usual ones on Kenyan plans are:

• Suicide in the first two years (some plans list it with no time limit)
• Death from a health condition you did not disclose when you applied
• Death while committing a crime, or from deliberate drug or alcohol abuse
• War, terrorism or riot when you take an active part
• Hazardous sports and private flying, unless the insurer agreed to cover them
• Natural-cause death during a waiting period, where the plan has one
• Any death after the policy has lapsed for unpaid premiums

Read the exclusions page of your policy, and tell us about any risky job or hobby before you apply.

In Kenya the two terms are used for the same thing: cover that pays when someone dies. Strictly, 'assurance' describes cover that will pay out at some point (whole life, endowment), and 'insurance' cover for a set period (term). Insurers' company names often say 'Life Assurance'.

No law makes individuals buy life insurance. A bank or SACCO may make credit life or mortgage protection a condition of a loan, and many employers provide group life, but your own cover is your choice.

Insurers publish only starting prices: Britam's term plan from KES 3,000 a month for KES 3 million over 5 years, ICEA LION from KES 2,000 a month, APA's micro cover KES 200 a month for KES 100,000. A Kenyan planning estimate puts KES 10 million of 20-year term cover for a healthy 30-year-old at KES 4,000 to 8,000 a month. Your age, health and the term decide the exact figure.

Enough to replace your income for the years your family would need it, plus your debts, your children's school fees and funeral costs, minus your savings and any cover you already have. Advisers' rules of thumb range from 6 to 8 and up to 10 to 15 times annual income. Our calculator works it out from your own figures.

Usually, yes. Group life typically pays 3 to 5 times your salary, which is often less than your family needs, and it ends when you leave the job. Your own policy stays with you and can be sized to your debts and dependants.

Often, yes. Insurers decide case by case: they may accept you at the normal rate, add to the premium, exclude a condition, postpone or decline. By law no one can be made to take an HIV test to get cover below the insurer's no-disclosure limit. Always disclose your health honestly: an undisclosed condition can void a claim.

Most insurers give a grace period, often 30 days. If the premium is still unpaid the policy lapses and nothing is paid on a claim. Savings-type policies with a cash value may keep going for a while through an automatic premium loan; ask us before you stop paying.

Yes. Kenyan insurers give a free-look period after the policy arrives (15 days at Madison Life, for example) in which you can return it and get your premiums back, less any medical fees.

Yes. Resident individuals get insurance relief of 15% of the premiums paid on life, education and health policies for themselves, a spouse or a child, up to KES 60,000 a year. Employees usually claim it through payroll.

Kenya has no estate or inheritance duty, and a death benefit paid to your family is generally not treated as their income. Ask a tax adviser about policies owned by a business.

Choose an IRA-licensed insurer. If a licensed insurer fails, the Policyholders Compensation Fund pays up to KES 500,000 per claimant on Kenyan policies. We check an insurer's standing before we place your cover.

We are an IRA-licensed insurance agency. We size your cover, compare plans from Kenya's licensed life insurers, help with the medical and the nomination form, and support your family if they ever need to claim. Our advice costs you nothing extra.