From myriad taxes to extremely high costs of food and transport, Kenya is experiencing a significant rise in the cost of living. If this has affected you in one way or another, you must have made adjustments to enable you to live within your means or contemplated leaving the country altogether! In this reaction to what seems like a helpless situation, one of the first items you may have earmarked for cancellation is your life insurance policy, but not too fast!
It is evident from conversations on social media and stories on mainstream media that, despite the current situation, financial security is still important to many people. It is therefore likely to be counterproductive for you in the long run, if you cancel your policy due to a temporary rough patch. If you are already struggling, rather than cancel, you can talk to your insurance provider for options such as changing the maturity date, adjusting your monthly contributions (premiums), or taking up a policy loan! You can also convert your policy to paid-up value (this means asking to stop paying premiums after a certain duration so the policy can grow naturally at with a target, reduced sum assured (i.e eventual payout). What we are saying is, that cancelling a policy might make you comfortable now, but you will miss out on what a life insurance policy could help you accomplish now and in the future.
Here are FIVE reasons why you should continue paying life insurance premiums despite the high cost of living:
- A financial cushion– As unpredictable as life is, you could lose your source of income, become critically ill, suffer permanent disability or even, unfortunately, succumb to death. In case of such occurrences, your policy kicks in and releases a host of benefits such as a funeral expense, or a sum of money to your dependents. This sum of money is the amount you agreed on with the insurer at the beginning of the policy (also sum assured)
- Policy loans– In case the cost of living keeps rising, and you need a lump sum to fix some urgent issues such as school fees, you can take up a loan against your premiums from your insurer at much more friendly terms.
- Wealth accumulation– It is most people’s wish that they hand down a financial legacy to generations to come. Life insurance policies like Geminia Life Whole Life Policy can be a great plan to help you fulfill such dreams. You save up for the rest of your life or a specified duration and the money is transferred to your preferred beneficiary in the unfortunate event of your demise. This is a very useful policy.
- Retirement – Whether you want to retire early or wait for the normal retirement age, setting up a Personal Pension Plan will help you relax and enjoy life when that time comes.
- Time Value of money – Most policies earn interest (also called bonuses) that are a near match to inflation, hence preserving the value of your money over time. Your shilling today is worth much less when the cost of living skyrockets if you do not grow it.
If you do not have a life insurance policy, don’t shy away because of the high cost of living. You can get policies from as low as Ksh 1,000 per month. For free financial planning advice please call 0709 551 150 or WhatsApp 0700 053 128.