My take on education insurance policies

General
1

First of all education insurance is not an investment. Its a protection. So don’t compare education polices to buying land or starting a business etc.

If you’re sure that you are not going to die or get incapacitated, don’t invest in education policies. Also if you don’t care about what happens to your kids when you die, then don’t invest. Live to the full and once you die watu wajipange.

Having cleared that, I will give you a real example with the policy I took for my kid.

Sum assured- 1,800,000
Policy term- 10 years
monthly contribution - 30,000
Total contribution after 10 years- 3,600,000
Tax relief at 15%- (540,000)
So after 10 years I will have been deducted 3,060,000 towards this policy

If I don’t die or get incapacitated during the 10 years, the payout will be as follows:

Year 6- Kshs 540,000
Year 7- Kshs 540,000
Year 8- Kshs 540,000
Year 9- Kshs 540,000
Year 10 - Kshs 1,800,000

So in total I will receive Kshs 3,960,000 which translates to a tax free gain of Kshs 1,036,020. This is a 35% gain which is very low for 10 years. It’s like 4% per year. That’s why I said insurance is not an investment.

So why am I saying insurance is a protection?

Same policy of 10 years where the sum assured is Kshs 1,800,000 and payment is 30,000 per month.

In case I die before the policy matures,

  1. The monthly premiums of Kshs 30,000 are waived immediately
  2. The insurance pays 100% of the sum assured immediately i.e. Kshs 1,800,000
  3. The insurance will continue paying partial maturities of 120% sum assured i.e. Kshs 2,160,000
  4. At maturity i.e. the 10th year, the insurance will pay the sum assured i.e. 1,800,000

So in total the total payout will be 5,760,000.

The payout is higher for accidental death, critical illness and permanent disability

Other benefits include: Policy loan available after three years of premium payment

So the choice of investing in the education policy for your kids is yours.

Iko swali?

2

which insurance company are you working for ?

3

now tell us if you dont contribute for 2 months what happens?

4

Good insight there. The issue is when the contributor dies inakua Mchezo wa paka na panya. From what av seen few friends go through I developed a very negative attitude towards the insurance sector. To some extent, to me they look like thiefs putting on expensive suits and shoes.anyway that’s my opinion

5

I agree with you. Insurance kulipa mtu huwa shida.
That’s why for me I preferred to use standard chartered bank as my agent . A reputable agent will make sure you get paid.

6

Dont have those details

7

all progress you’ve made goes inside the likoni channel

8

Mtu anaweza lipa hiyo 3.6M upfront ibaki kungojea miaka za maturity?
This has been my only issue with these policies.I maybe in a position now to pay whole amount as opposed to monthly contributions due to unstable income and am sure majority of Kenyans wako hapa!

9

Then you are telling us. Half baked stories. Ogopa sana

10

They can’t allow you to pay off the whole policy at once. They need the constant small amounts to build up their reputations in financial institutions that they depend on.

11

Hapo ndio sipendi.
For business people especially here in Kenya it’s almost impossible to predict how biz will be like hata next year wacha 10years from now!

12

Must be [someone’s] AMARCO

13

Yes you can pay the whole amount at once but I wouldn’t advise you because of two reasons:

  1. If you have the 3.6M better have it in interest free bills and get 9% compounded.
    2.If something happens to you after you pay the 3.6M you will be worse off than someone who had paid small premiums.
14

Jamaa amekalishwa hapo Premium Banking akapewa kahawa na sweet stories of how Insurance is good.

Tembelea Insurance Regulatory Authority ukiwa free uambiwe the horror stories za hizi Education Policies vile hurukwa kama mimba incase you die before maturity. Utashangaa vile they will remove clauses zingine wakijitoa from paying. Watu huumia ni the widows of the deceased, coz they never come forward to challenge them or sue them…

Kuna office hao salesmen wa Jubilee Insurance hawaezi Kanyaga due to such drama a while ago huko coast region.

15

Am in my 4th year now. So far so good. Hata life insurance ninayo. To me insurance is good and necessary

16

That’s why I concluded by saying decision is yours.

17

With all due respect bwana Okis, umeanza kuwa kama brown skin @azhor Ahai. Hii hungechangia kwa ile thread nyingine to enrich it?

18

Let me ask.
Since most guys take the education insurance for the bila mawife kujua nani atafuatilia payment after demise ya msee for example.
Secondly does insurance really pay out without a hustle.
Third,am being coerced by some jubilee chick to take up this policy.
What’s your take Sir?
Fourth.
Please advise the best companies to insure with and those we can’t touch with a seven foot pole.
Thanks.

19

Insurance ni kama malaya, utajua ni mbaya ukikosa kulipa. As for you, just be keeping records. So bad are the horror stories, that some actually change beneficiaries time ya maturity coz the beneficiaries are not aware there is a policy maturing. So usifiche bibi na watoto any insurance unawalipia.

20

Isn’t that what everyone does? A bank his/her bank as an agent?