Insurance is a contract between an insurance company and the insured. An insurance policy contract stipulates what is covered, what is not covered, the policy number, premiums to be paid, among other details.
In Kenya, there are 5 main types of insurance policies. These include:
1) Health insurance
Kenyans have access to both government and individual health insurance. The available health insurance policies in the market cover both curative and preventive care. However, the extent of the coverage usually depends on the policy taken out by the individual.
For example, young and healthy individuals can take a less comprehensive cover. Whereas the elderly, people with families, or individuals with chronic illnesses, need to take more comprehensive cover.
Inadvertently, this determines the premiums paid.
2) Property insurance
Most property owners in Kenyans do not take property insurance. However, it is a prudent policy for any property owner to have.
Under property insurance, the insured risk can be fire, theft, or damage to goods in the property.
The policy can go further and cover natural disasters like floods, earthquakes, extreme winds, and wildfires.
3) Life insurance
Benjamin Franklin said, “There are only two things which are certain in life: death and taxes.” In this regard, life insurance covers the eventuality of death.
Under the life insurance policy, there is a whole life policy, where the beneficiaries of the insured are compensated in case of death.
On the other hand, there is term life insurance which covers a set period. For example, it can cover 5, 10, 15, or 20 years, depending on the preference of the person taking the policy. It is mainly taken by breadwinners to cover loss of income in cases of job loss.
The insured must make full disclosure of their past and current medical history and if they involve themselves in high-risk activities when taking out this policy.
4) Disability insurance
This insurance policy is similar to life insurance and covers the insured in case they are injured and are no longer able to work. It compensates for their loss of income.
The disability insurance policies in Kenya cover permanent, temporary, partial, or total disability.
However, the extent of cover depends on the terms of the insurance cover taken. And in most, disability insurance policies do not cover for medical care and services in the long term.
So, who is needs this insurance? This insurance is best suited for individuals in high-risk jobs like construction and extraction, machine operators, fishing, and transport operators.
5) Motor insurance
The Kenyan law requires every vehicle on the road to have auto insurance. If you have just purchased your car, or have been driving with expired insurance, it is high time you get your car insured.
In Kenya, the three main motor insurance cover is comprehensive, Third Party, Fire & Theft (TP&FT), and Third Party Only (TPO).
The difference between them is the scope of cover that the motorist gets. However, the minimum legal cover required is TPO.