Insurance is broadly divided into two:
- General or Non-Life Insurance (short-term)
- Life Insurance (long-term).
A. General or Non-Life Insurance
This is a contract where the insurer (insurance company) promises to compensate the insured (an individual or business) in the event that there is a loss/damage to property or against liability. Most general insurances are annual or short-term contracts.
i. General Insurance for Individuals
Individuals require insurance that will cover and protect their interests. Insurance covers that can be taken by individuals include but not limited to; motor insurance, personal accident, professional indemnity, domestic package, medical insurance, travel insurance.
ii. General Insurance for Businesses
Every type of business is exposed to different types of risks. When running a business, it is important to make sure that all aspects are covered i.e. liability towards staff, customers, members of the public, business activities and possessions.
iii. General Insurance for Businesses
Insurances that cover some of the business risks include; fire, burglary, business interruption, WIBA, employee liability, public and product liability, electronic equipment, medical, marine, goods in transit, money, fidelity guarantee, political violence & terrorism just to name a few.
B. Life Insurance
Life is an ever changing cycle and with each cycle our needs and obligations change. What was an obligation when young, may change when older. As we change, so do our insurance needs. As a result, our stages in life are often a great influence to our insurance needs. Life insurance is a contract between an insurance company and an insured. Life policies can either be for protection against the insured and their families. It can provide financial support in the event of critical illness, disability or sudden death.
It can also act as a long-term investment where the aim is to save and grow money that will help meet goals such as children’s education, children’s marriage, building a dream home or a relaxed retirement life. The insured pays the premium and the insurer pays a lump sum of money after a certain period of time to an appointed beneficiary when the insured event occurs. Life insurance also allows a tax relief of 15% for a maximum of Ksh. 60,000 premium per year (Ksh. 5,000 per month).
