Kenyans must embrace the culture of having an insurance cover

  

Date Posted: 11/14/2012 9:41:10 PM

Posted By: Mrs kihara  Membership Level: Silver  Total Points: 543

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A recent survey carried out in Kenya really surprised me.It left me wondering why we like to take risks.According to the survey,less than 2% of Kenyans have insurance covers.In life,there are hazards that have confronted man since time immemorial.Insurance reduces the impact of these hazards.It involves grouping people together so as to share the risk.

Insurance is a contract in which one party agrees to pay a given sum upon the happening of a particular event in exchange of payment of premiums.Premiums is the payment that the insured pays the insurer in exchange of an insurance cover.The premium is paid either in one sum(single premium) or by a succession of installments usually yearly,half-yearly,quarterly or monthly.

By paying the premium,we transfer the risk to the insurer.We insure against unforeseen circumstances.The importance of insurance cannot be underestimated.It plays a significant role in our lives in particular and the nation in general. But why do we take risks?Insurance should be a priority in our lives.We should transfer the risk to the insurer.Why is having an insurance cover important?

These are some of the advantages of having an insurance cover.

1.It caters for financial consequences of premature death of breadwinners through incomes and cash lump sum payments,which bereaved families,need as they adjust to their new situation.

2.It provides cover against old age through annuities and pensions arrangements thereby proving financial independence to the elderly.

3.It provides the insured with peace of mind because they know they will be compensated in case a calamity strikes.

4.Through payment of premiums,employment opportunities are created thereby alleviating unemployment in the nation.

5.It covers a child's education in the event of death of parent or guardian.Education is beneficial as it leads to acquisition of skills.

6.It reduces an individual's over-dependence on the community through provision of income to meet individual needs,such as disability care and funeral expenses,which would have otherwise been borne by the community.

7.It enables transactions beneficial to the society to take place.For,example,individuals can purchase houses on loan and buy life assurance protection to cover outstanding debts.This enables members of the community to own houses thereby reducing the number of homeless people in the society.

8.It is a good mechanism of mobilizing capital required for national development.The pooled premiums held by life assurance companies can be invested in government securities and in private sector institutions such as the stock exchange.

Having an insurance cover is important.It should be our priority.Don't take chances,insure today.

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