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Education/Life Policy
Rank: Elder Joined: 9/29/2006 Posts: 2,570
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Inuendo wrote:I consider myself very lucky to have read these threads at this time heheheh was just about to commit to an education policy...  =>share your thoughts bro/sis. The opposite of courage is not cowardice, it's conformity.
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Rank: Member Joined: 12/2/2009 Posts: 286 Location: Nairobi
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mukiha wrote: Don't assess insurance on the basis of returns at maturity. Think about this, what return do you get after insuring your car for a year? Zero - thus you actually loose the whole premium! Life insurance should be viewed in the same way. The monthly/yearly payments are PREMIUMS. They will never be paid back to you. The SUM-INSURED is the amount they will pay your beneficiary in case you die any time during the cover... even five minutes after making the first payment. Just like car insurance, if you don't die before the expiry of the cover, you loose the whole premium! However, the insurance company decides to be generous to you and pays you the SUM-INSURED. This should not be compared to the premiums, after all, it is NOT an investment. What you should do instead is decide how much premium you want to pay and then compare how much SUM-INSURED you can get from different insurance companies. Conversely, decide how much SUM-INSURED you want, then compare how much it will cost (the PREMIUMS) at different insurance companies. Isn't this the same thing we do when shopping for car insurance? We should treat life cove the same way Great plan, totally agreed with you. In the same boat. When you talk insurance, think of security incase of your demise, not investment in terms of returns! The laudable is more often than not rendered laughable by overclaim
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Rank: Member Joined: 8/25/2008 Posts: 144
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Develop a direct relationship with the insurance company not the Agent. Most life insurance companies have very well established front offices and customer service. Most of them are above board. Insure and invest at the same time. One is not a substitute of the other. Been with Kenindia now for over 8 years, both life and education. Also with CFC life both life and education. No complain so far.
Most of all, research and make the decision yourself.
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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[quote=Barrywhite]mukiha wrote:
Just like car insurance, if you don't die before the expiry of the cover, you loose the whole premium! However, the insurance company decides to be generous to you and pays you the SUM-INSURED. This should not be compared to the premiums, after all, it is NOT an investment.
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Your description applies only to one form of life insurance, there are many types, some pay even when you dont die depending on the product you choose/buy. Be sure of what you say.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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Layman wrote:[quote=Barrywhite]mukiha wrote:
Just like car insurance, if you don't die before the expiry of the cover, you loose the whole premium! However, the insurance company decides to be generous to you and pays you the SUM-INSURED. This should not be compared to the premiums, after all, it is NOT an investment.
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Your description applies only to one form of life insurance, there are many types, some pay even when you dont die depending on the product you choose/buy. Be sure of what you say. Show me an insurance policy that pays back the premiums and I will show you a con-artist! The point I am trying to make is that insurance IS NOT investment. Comparing the two is like comparing elephants to mobile phones! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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mukiha wrote:Layman wrote:[quote=Barrywhite]mukiha wrote:
Just like car insurance, if you don't die before the expiry of the cover, you loose the whole premium! However, the insurance company decides to be generous to you and pays you the SUM-INSURED. This should not be compared to the premiums, after all, it is NOT an investment.
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Your description applies only to one form of life insurance, there are many types, some pay even when you dont die depending on the product you choose/buy. Be sure of what you say. Show me an insurance policy that pays back the premiums and I will show you a con-artist!The point I am trying to make is that insurance IS NOT investment. Comparing the two is like comparing elephants to mobile phones! Conditions upon which premiums are refundable to the clients are fully specified in the contracts, each contract is unique. Will you stop generalised statements when you dont have facts, you are misleading many pipo reading this post. Which policy did you take and under what circumstances did you fail to get back the premium? I dont think you have ever taken any long term (life/education) insurance policy in your life and thats may explain why you have bad attitude on insurance.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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@Layman; let me clarify. The only time I know when premiums are REFUNDED is when a policy is cancelled. However, when a policy lives to maturity, the premium is not refunded. Whatever amounts that the client gets are calculated using the SUM INSURED, not the premium. Therefore, when one is assessing the benefits of a policy, it would be misleading to look at it in terms of premiums paid - in the way one would assess an investment in terms of price paid. The only time I can think off that one can look at the price is when comparing two or more insurance policies. But comparing an education policy to, say, buying a plot of land [as one person has done in this thread] is not correct. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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mukiha wrote:@Layman; let me clarify. The only time I know when premiums are REFUNDED is when a policy is cancelled.
However, when a policy lives to maturity, the premium is not refunded. Whatever amounts that the client gets are calculated using the SUM INSURED, not the premium.
Therefore, when one is assessing the benefits of a policy, it would be misleading to look at it in terms of premiums paid - in the way one would assess an investment in terms of price paid.
The only time I can think off that one can look at the price is when comparing two or more insurance policies. But comparing an education policy to, say, buying a plot of land [as one person has done in this thread] is not correct.
Thank you veerryyyyyyyy much, we are together now, at least you know premiums are refundable as prrovided for in the contract, an example when policy is cancelled or when a kid whose name an education policy was taken passes on, etc but all must be as per the privisions of the contract....contract...contract....contract.... is the key thing here, dont breach it.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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@Layman; now that we are on the same page, what's take on comparing, say, an education policy to investing the same money in a plot? Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Member Joined: 12/2/2009 Posts: 286 Location: Nairobi
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@ Mukiha Gentlemen; there is an insurance called Life Insurance & endowment cover or life insurance & investment cover that indeed pays you at maturity if you dont die! If you do, it pays your dependants. The laudable is more often than not rendered laughable by overclaim
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Rank: Member Joined: 3/7/2011 Posts: 112
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Every time my money goes when I get into insurance policies. I have lost so much money I hate to do the calculations.
Just invest in plots; if you are not there, things will resolve themselves ..... if you have property, especially one that generates income.
The Government, Banks, Insurance Companies, etc are called "Predators" out to enjoy your hard earned cash ... that is what Kiyosaki says we should guard ourselves against ... wish I knew this years ago.
These salesmen are deadly!!
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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Low uptake of insurance linked to confusing details: READ HERE: http://www.businessdaily.../-/15uyrfc/-/index.html
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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mukiha wrote:@Layman; now that we are on the same page, what's take on comparing, say, an education policy to investing the same money in a plot? To me, the only difference is that you keep off the worries with Educatiojn policy as it doesn't involve you much apart from religiously paying the premium as you wait for the maturity of the policy (the insurance doesnt have to pay school fees, you may opt to take the lumps sum cash and put somewhere else). However, the returns may be a little low.
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Rank: Elder Joined: 6/19/2008 Posts: 4,268
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mukiha wrote:
The only time I can think off that one can look at the price is when comparing two or more insurance policies. But comparing an education policy to, say, buying a plot of land [as one person has done in this thread] is not correct.
You are right... these are two different vehicles leading to solving the same problem - the piece of mind that your children's education is guaranteed. The only comparison came in because they were both being used to solve same kind of problem. While the insurance will cover you incase of death, i know, from the investments, your children's education are also covered because those properties can be liquidated to serve the same purpose. While payment of the same amount (albeit over time) would have lead to a lumpsum payment of 1m after 13years, if invested elsewhere, you can still have your 1m and more 13 years on.... lets say, the only risk that you need to accept/absorb is at the time when you pass-on before your investment grows to the sum insured that you'd have been paid. Once your investment surpasses the sum insured, then you are covered. What you invest on also matters. For example, putting the same amount in shares or in business is more risky than investing in say property. You look for the low risk investments that will grow much faster and surpass what you'd get as sum insured (if same amount was used as premium) to meet your children's education needs. The beauty with investing is that, even if you passed on, and say your spouse can afford to continue paying schoolfees for your kids even after the "maturity date" then they dont have to liquidate the investments and it can be left for the value to continue growing.... for the insurance, once maturity time comes, you get your pay what you do with it is another story.... not withstanding the erosion of the sum insured value because of inflation and other economic factors. Investments tend to respond to this and adjust accordingly faster than the policies would. Bottomline, we have same destination - getting the kids educated - but we use different vehicles to get there. For me, I still believe it was the best decision i ever made. No regrets whatsoever. I am still not touching education policies.
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Rank: Elder Joined: 5/1/2010 Posts: 3,024 Location: Hapa
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Was looking for opinions on life cover policies and endowment policies and the discussions on this thread have been valuable. Thanks wazuans. For me it's all about purpose, policies are largely about protection which investments may or may not provide. If I can afford it, I'd do both. I'd like to be an african who plans better more inputs/opinions are welcome Float like a butterfly, sting like a bee. - Muhammad Ali🐝
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Rank: Hello Joined: 5/9/2012 Posts: 1
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Insurance is designed to protect you from suffering a loss that you cannot afford. Medicine and education are the two industries were prices never fall as technology increases. So if the unthinkable occurs, insurance is there to protect you from financial ruin.
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Rank: New-farer Joined: 1/9/2012 Posts: 23
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i have been working in the insurance industry for sometime, i will advise the following key pointers. 1. deal with a professional agent, most agents are employed on a temporary basis and will care less on your well being,will mis-sell the product as their main aim is short term, commission vs client retention. 2. shop around for the best deal, why take an education policy giving projections as little as 6% or 8% on a ten year deal when there are unit trust linked products that can give over 12% compound interest or above for the same. 3. read the fine print, terms and conditions. most agents will not tell you this as the main objective is their sale. i.e paid up value,where you will lose money if you default during this period. 4. disclosure, brings me back to the agent. According to new AKI regulations, the agent will if asked, disclose to you what percentage of commission he will earn from the sale. there are companies which give their agents 40% of your premium for the first 2 years, this is atrocious! 5. when taking life insurance, treat is as protection,not investment. securing your assets and family incase of death or disabilty, the sum assured is not yours,it will go to your beneficiaries. life insurance is cheap and mandatory i.e for a 42 yr old man the premium comes to roughly ksh. 2000 per month!if you have actualised and have a futuristic plan, you can treat is as inheritance for your kids. 6. for an education policy,look for the most key benefit. the premium waiver. this binds the insurance company to continue paying premiums on your behalf to the maximum term period, incase of death or dis ability occurs to you, in other words, you have guarateed your child an education! this is invaluable, you might have the know how to invest money elsewhere for your child's future for much more impressive returns, but what will happen to your child if you were to God-forbid, die or be permanently disabled? profit vs security? thats where you make your choice. 7. always try to deal with the reputable companies,the so called 'big fish'. they may be high end or expensive but, we all know cheap is expensive. companies where you can pay conviniently,get statements online, access statements anytime you want to, access your agent incase of need, get advise on opportunity from your agent or company and most importantly pay as per agreement on maturity. 8. lastly,insurance is supposed to let you sleep easy,knowing your assets are safe,kids future is safe and lastly your family's livelyhood is guaranteed whether your there or not. anymore queries i will give free advise, nychmwus@gmail.com
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Rank: Member Joined: 4/20/2010 Posts: 412 Location: nairobi
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@nikimani, thank you. I have been struggling to take it because my mind was set on profit instead of security? The only time you should be looking down on others is when you are helping them up.
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Rank: New-farer Joined: 1/9/2012 Posts: 23
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