Have Any Questions?

+254 732 393 100



Visit Us Daily

Royal Office, 3rd Flr, Mogotio Rd, Nairobi

Our Working Hours

Mon-Fri 8.00am- 5.00pm

What type of Life Insurance should I buy?

Having choices is good, but sometime as a newcomer in Life insurance with numerous options and terms, deciding the best life insurance policy for you can be an overwhelming task. Sometimes, there are just too many fish in the sea, for you to recognize which one you really want to reel in.

The number one concern for all shoppers is, “What type of insurance should I buy?” For most buyers who have experience with insurance the question always boils down to two options; whether to buy a Term Insurance Policy or Whole Life Insurance Policy.

But do not you worry, we are going to break it down for you, a close overview of the main options available for you for the different life insurance policies will help you weed out what is an obvious No and the definite Yes to find the best matches for your insurance needs.

While there are lots of options best insurance companies in Kenya offer one or two of the following types of life insurance.

Term Life Insurance

Term life insurance is one of the most common life insurances purchased by most shoppers. Term life insurance is a policy that lasts for a set period – called the term. Once the time is up, ideally when you no longer need financial protection, the policy expires, pays off the benefits and you stop paying for it.

It is the most popular life insurance cover, that many people think about when they imagine how insurance works.

You pay a fixed regular amount of money called Premium in exchange for the promise that your life insurer will pay out a certain agreed financial benefit known as coverage to you or your beneficiaries either at the expiry of the policy or in the event an in eventuality occurring during the policy lifetime; such cases could be the insured contacting a critical ailment, disability or even death.

Many shoppers who choose term life insurance typically expect to cover more immediate needs that is like between 5 – 30 years down the line, instead of 50 years from today. With a term policy, parents can protect their income until their children grow up and become independent adults. Homeowners can ensure their partner will be able to pay off the mortgage and other financial obligations if they are no longer there.

Honestly, most people will outlive their term life policies. And that is a good thing, because most companies in Kenya offer only up to 25-year terms.

Since many people buy term life insurance at an early age, they are likely to outlive the term of their policy which what all insurers want to see.

The pricing of term life insurance can either be level term or non-level term. With a level term policy, you get the same coverage for the same price throughout the length of your term. Your premiums will never increase, and your anticipated benefits will never decrease.

This is the most popular option among many insurers and is best for buyers who want the same costs and benefits overtime.

Non-level term your life insurance policy changes steadily over time in one of two ways: either your premiums will go up, or your payout will decrease over time. One example is Mortgage insurance that has decreasing coverage needs. This type of policy pays the lender the remainder of your mortgage, which decreases as you make your monthly loan payments.

Because the value of a non-level policy decreases over time, you might expect this type of life insurance to cost less. Unfortunately, the price usually remains about the same, so most people opt for level term and it is particularly not popular among the industry leaders.

Bima Hakika’s Wiz

Term life is simple, straightforward, and inexpensive life insurance. It covers you only when you need it most, and you get to choose how long the policy will be in effect.

Whole life insurance

It is a type of life insurance that lasts through your entire life if you continue to pay your premiums. Whole life insurance pays out a death benefits to your dependents, but it also has a compulsory-savings component called the cash value that can grow over time.

Whole life insurance majorly serves as an inheritance, it is particularly useful as part of a highly customized personal finance and estate planning strategy. However, it is often relatively expensive it may cost 3 times more than a term life insurance.

However, you will not have to worry about going without coverage in your later years or not leaving an inheritance for your kids. You can decide how much of your premium goes toward funding your death benefit and how much goes into your cash value account.

Cash Value:

There are times when it makes sense to opt for a policy that builds cash value and lasts your entire life. We believe that everyone’s needs are unique and that there is no “one size fits all” insurance product to meet everyone’s need.

The #1 benefit of permanent life insurance is, well, the cash value. Particularly for a policy that builds early high cash value.

The #2 benefit why some people choose permanent life insurance, is they see the policy’s cash value as a tax-free savings or investment opportunity. This is partly right because each month, a portion of your permanent life insurance premium goes toward the cash value.


Bima Hakika’s Wiz

Permanent life is more expensive than term. Permanent life has more complexity because it comes with a cash value that acts a bit like a savings or investment account and grows as you pay your premiums. As the name implies, a permanent life insurance policy covers you for, well, life.

Specialty Life Insurance

There are many specialty life insurance options, but we will talk briefly about the most popular choice that is available in the Kenyan market. Specialty life insurance is majorly purchased by an employer to tackle a single life insurance need, such as paying for burial expenses or ensuring children are cared for if their parent (who is an employee) dies during their employment mostly referred to as Group Life Insurance.

Group life insurance is bought as part of a group, often through the employer or a union. And because it is bought in bulk, employers often secure low rates and may help cover some costs for the policies, making them an excellent deal for their employees. The catch is you lose the benefits if you leave the employment often when you change jobs.

Bima Hakika’s Wiz

Group life policies work best as a supplement to existing personal life insurance that you are in control, rather than as a standalone policy.


Important to note:

All underwriters factor in the type of policy you have chosen and your age. Depending on the underwriting process they use, they may also consider your health, family medical history, habits, and more. These factors most affect the rate you will pay for your life insurance.

Pre-existing health conditions and medical examination can cause delays in the application process or result in denial of cover.

At the end of the day, the most important thing to us is helping our clients find the best life insurance, based specifically on meeting their needs and goals.

Bima Hakika’s wiz

And for the parents out there, consider life insurance for kids as a fantastic way to save for their future and educate them about money.

Now that you have an idea on types of life insurance, you may want to determine how much life insurance to buy. And you can find that answer by engaging us today, no math required if any we will do.

*Life insurance rates are based on age, health, policy type, and more. Actual rates may vary.

Related stories 2;

Here are 5 things you might want to be covered for.

Are you trying to figure out if you may need life insurance? Right, keep reading and evaluate these 5 key financial obligations. If you have none of these obligations, lucky you!

Go for holidays, love life and live free. If not, it is still okay to stick with us, we will have more fun here we promise.

It is simple, think about the income that you would be missing out if something unexpected happened. How much money would need to make to fund your family financial needs and the struggle that would ensue in meeting the day-to-day budgets?

In that case, here are five thing you might want to be covered for;

  • An education fund for each child. (Consider inflation and the rising cost of education).

With a term policy, parents can protect their income until their children grow up. You want to be sure that your kids are well taken care of and can afford a quality college education. For this reason, additional coverage is essential while my kids are still at home.

  • Mortgage, loans, and other debts.

Homeowners can ensure their partner will be able to pay off the mortgage, their loans, and other debts if they die in addition to providing income to cover everyday living expenses, the family will need insurance to cover debts so they would not have to sell the house to stay solvent.

  • Retirement fund for yourself and spouse.

Buying a long-term life insurance that spans beyond your working years will help cater for the lost income that would cater for the most essentials to your lifestyle. At retirement you would still need to hire help for domestic tasks like cleaning the house, laundry, cooking, helping with garden, and doctor’s visits.

  • Disability Cover

A disability can led to financial disaster. You can lose your home, your vehicles, your livelihood, your family. But even though you have a higher likelihood of disability while you are young, most people add a disability rider benefit to their life insurance policy. According to statistics, a 20\ year old has a 25% chance of becoming disabled by the time they retire. So always cover for this.

Bima Hakika Wiz

If you have a group disability insurance policy through your employer, you may need to consider getting a supplemental disability insurance policy that you own personally. Many times, employer-based disability insurance policies do not provide enough benefits, or the terms applied are too restrictive.

The major financial obligations that you are signed into and would eat into your estate if you died prematurely.

  • To pay for Final Expenses

Let us face it, these WhatsApp groups are already becoming a bother, of course the cost of a funeral and burial can easily run into thousands of monies that forces many to call for Harambees. But guess what life insurance with a funeral rider benefit will ensure your parents, or children do not suffer financially in addition to emotionally at your deathbed.

Bima Hakika’s Wiz.

Debts and financial responsibilities that belong to you and nobody else do not just vanish when you go. Instead, they become the responsibility of your loved ones. If you are relying on your estate to take care of your family, these debts could eat into your estate and leave your family with too little or nothing.

Bima Hakika’s Wiz

You can’t legally name a minor as the beneficiary of a life insurance policy. If you want to leave money for your underage children, you will need to set up a trust and choose a trusted adult to control those funds until your children grow up.

Because life insurance is not one-size fits most service, the best life insurance policy will vary based on your individual circumstances. Only after we gather ample information can we make the best life insurance recommendation and find the best-suited policy for you.

Bima Hakika’s Thoughts

Of course, there is no bet – you will die, and I will die, but no one knows when. It could be today, tomorrow, or 70 years into the future, but it will happen eventually. Life insurance protects our heirs from the unknowable and helps them through an otherwise tough time of loss.

Do you have life insurance? Why or why not?

Leave a comment

Your email address will not be published. Required fields are marked *