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Pandemic has altered attitudes towards life insurance cover

FINANCIAL STANDARD
By Anne Nyamu | August 3rd 2021

The coronavirus pandemic has upended every facet of life, especially human attitudes towards mortality.

The disruption of livelihoods and businesses has pushed people to rediscover what matters most in their lives.

A global survey by Swiss Re mid-last year revealed that Covid-19 has profoundly influenced individuals to rethink what’s important to them.

The pandemic has been a time for reflection, self-awareness and putting life into perspective.

It has also reaffirmed the transience of life and the need to plan for any eventuality - the fundamental principle underpinning life insurance.

Another survey by PWC in June last year showed that 15 per cent of those interviewed were likely to purchase life insurance due to Covid-19 and nine per cent were considering buying a critical illness cover.

With the impact of the contagion now better understood, there is increased awareness of the need for life insurance in providing financial security to households.

The purpose of life insurance is to offer a financial cushion to your family when you are no longer there to provide for them.

Insurance means that you are covered for certain risks in life and the potential financial loss that may arise. Term life insurance guarantees payment of a death benefit in the term of an active policy.  

Life insurance essentially takes care of risks related to death or permanent disability.

It is the money a family would need to maintain its standard of living should the breadwinner die and therefore offers some sort of social protection to households and families.

Covid-19 has affected many families, with others infected with the virus. Therefore, many families have come to appreciate the value of insurance, with increased awareness and interest in life insurance and critical illness cover.

On the flip side, loss of business and employment income has constrained the ability of households to purchase insurance and sustain premiums. That said, the question of mortality has gained prominence and triggered greater interest in life protection.

In the unfortunate event of the demise of loved ones, such as where the breadwinner has passed on due to the virus, life insurance has saved the situation by paying school fees and providing daily upkeep for the beneficiaries.

However, life insurance uptake in Kenya remains low even with the many benefits available. In 2019, the Association of Kenya Insurers (AKI) reported that insurance penetration in Kenya had dropped to 2.43 per cent of the Gross Domestic Product (GDP), the lowest in 15 years.

This underscores the need to sensitise Kenyans on the importance of life insurance and critical illness cover.

We also need to debunk the myth that Life insurance is a preserve for the wealthy and thus unaffordable.

Covid 19 Time Series

 

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