Best Life Insurance in Kenya: Comparing the Top Life Insurance Policies

More Kenyans are considering life insurance because they offer cash value (money) and protection, helping them reach their dual goal of achieving their dreams and at the same time protecting their family financially whether they are there or not.

In Kenya content, when we talk of life insurance we mostly mean life insurance that combines life protection with savings or investment features such as:

• Endowment insurance policies
• Education insurance policies
• Whole life insurance policies with cash value
• Investment-linked (unit-linked) life insurance policies

However, there is another form of life insurance called pure risk life insurance. To understand Pure life insurance (term assurance), here are its characteristics:

• Pays only if you die during the policy term
• No savings component
• No maturity benefit
• Much cheaper
• Highest death cover per shilling paid

Cash value life insurance including whole life, endowment, and many investment-linked plans has mainly the following components:

• Death benefit
• Cash value or savings
• May pay out at maturity
• Usually cost much more
• Often sold as a way to save and protect simultaneously

Today, we shall look at both cash value and pure life insurance in Kenya, comparing the top life insurance policies, listing the best among them in each classification as provided by the top insurers.

The challenge is in choosing between dozens of policies especially when you have no information what they are and what they do. In this write-up, before you commit, you shall have all the information you need to make an informed choice.

Again, you can get more clarification by calling or chatting with me through the contacts provided below.

The policies that I shall include here are carefully selected given their features and their ability to meet the need they are designed for. They are exclusively chosen from the top insurers that have a track record of good service delivery and excellence.

I chose them based on coverage amount, premium affordability, flexibility, cash value and maturity benefits, claims reputation, financial strength of the Insurer and additional benefits and riders.

What Is Life Insurance in Kenya?

Pure Life Insurance (Term Life)

Pure life insurance is also referred to as the term life insurance or term assurance.

It is the simplest form of life insurance and it is designed to provide financial payout to your beneficiaries if the policyholder dies within a specified period (term) of the policy.

How it works in pure life insurance.

• You choose a sum assured, the amount of money you want  to be paid out to the beneficiaries when you die.

• You choose a term, for example 5, 10, 20, or 30 years.
• You pay regular premiums, usually monthly, quarterly, or annually).
• If you die during the policy term, the insurer (insurance company) pays the sum assured to your beneficiaries.
• If you survive until the end of the term, the policy expires and typically no benefit is paid to you or your beneficiaries.

Allow me to give you an example. Let’s say you have  enrolled in a pure/term life insurance with a policy term of 20 years and the sum assured is KES 25,000,000.

During the 20-year policy term, you will be making regular contributions either monthly, quarterly, semi-annually or yearly.

If you die with the 20-year policy term, KES 25,000,000 is paid to the beneficiaries.

If you survive until the 20-year policy term comes to an end, neither you nor your beneficiary receives a payout and the cover terminates.

Pure/term life insurance has some advantages and shortcomings.

Advantages of Pure Life Insurance

• Pure life insurance has lower premiums compared to cash value, whole-life or investment-linked policies.
• High coverage amounts (payouts) for relatively low cost.
• Ideal for protecting a family against loss of income if the breadwinner dies e.g. parent.
• Can help cover mortgages, school fees, loans, and living expenses if the insured dies.

Shortcomings of Term Life Insurance

• Pure life insurance has no built-in maturity benefit.
• Coverage ends when the term expires.
• No cash value accumulation

Given its advantages and shortcomings, should you consider it or not?

Pure life insurance is suitable for you if you are a:

• Parent with young children.
• Breadwinner supporting a family.
• Person with mortgages or significant loans.
• Business owner who want to protect partners or dependents.

Cash Value Life Insurance

Cash value life insurance is an endowment policy or a life insurance product that combines insurance protection with a savings or investment component.

Part of the regular premium contributions that you make (monthly, quarterly, semi-annually, or annually) goes to insurance life protection, while another part accumulates value over time.

Most common cash value life insurance in Kenya include:

1. Whole Life Insurance

This type of cash value insurance offers a lifetime life insurance cover as long as the premiums are paid.

How Whole Life Insurance Works

When you enroll in whole life insurance, the regular premium contributions you make:

• A portion of your premium pays for insurance life protection.
• Another portion builds a cash value.
• The cash value grows over time and may be accessible through policy loans or withdrawals, and the accessibility of cash value depends on the insurer.

In whole life insurance, you can decide to make the regular premium contributions over a particular term period specified in the policy and upon the end of that term you have chosen, you stop paying the regular contributions, but the coverage continues your entire Lifetime.

Advantages of Whole Life Insurance

• Lifetime coverage.
• Builds cash value and sometimes ensurers give a specific return rate.
• Can be used for estate planning and inheritance.
• Premiums are usually fixed.

Shortcomings of Whole Life Insurance Policy

• It is usually more expensive than term life insurance because of the cash value component.
• Returns on cash value may be relatively modest, usually due to the guarantees
• Surrendering the policy early can result in penalties.

The importance of whole life insurance is lifetime protection and wealth transfer to heirs.

2. Endowment Policies

Endowment policies also combine insurance life protection with cash value that build over the term (saving period) selected. A good example of an endowment plan is education life insurance policies.

Endowment policies pay survival or/and maturity benefits at specified dates or upon the occurrence of unforeseen events covered in the policies such death or disability during the policy term.

How Endowment Policies Work

When you enroll in an endowment policy, for example of a 10-years endowment policy:

• if you survive till the end of the policy term, you get a maturity payout. Some policies have in between payouts called the survival benefits paid regularly after every defined number of years.
• If an unfortunate event covered in the policy occurs before the maturity, such as death, your beneficiaries receive the death benefit.

Advantages of Endowment Policies

• Endowment policies offer guaranteed maturity benefits.
• Encourages disciplined savings, helping you achieve your financial goals.
• Provides life cover during the term, guaranteeing your future financial goals and protecting your family

Shortcomings of Endowment Policies

• Higher premiums than term insurance since your premium covers two components, life protection and building cash value
• Returns may not always keep pace with inflation, similar to investments.
• Less flexible than other investments.

Endowment policies are used for saving toward a specific future date while maintaining life cover.

3. Investment-Linked Life Insurance (Unit-Linked Plans)

Investment-linked or what we simply call unit-linked life insurance combine life insurance with investment in market-based funds.

How Unit-linked Life Insurance Works

• Part of the regular premium contributions pays for insurance protection.
• Part is invested in selected funds such as equities, balanced funds, or money market funds.
• The value depends on investment performance, so no guarantees like in the endowment policies.

Benefits Of Unit-linked Life insurance

• Potentially higher returns when the economy is doing well.
• Flexibility to choose investment funds (sometimes).
• Life cover and investment in one product.
• Greater transparency on fund performance.

Shortcomings Of Unit-linked Life Insurance

• Investment risk is borne by the policyholder.
• Returns are not guaranteed.
• Management and policy charges can reduce returns.
• Fund values can decline during market downturns.

Unit-linked life insurance importance is to combine life cover with long-term wealth accumulation and a willingness to accept investment risk.

We start by reviewing and comparing the best endowment policies in Kenya.

Quick Comparison: Best Life Insurance Endowment Policies in Kenya

Detailed Review of the Top Life Insurance/Endowment Policies in Kenya

1. Britam Akiba Endowment Policy

Britam Akiba endowment policy is one of the top cash value life insurance in the market with great returns and adequate life protection against death.

Key Features of the Britam Akiba Endowment Plan

• The minimum entry age is 18 years and the maximum age is 65 years. It is mostly suitable for people under 50 years as they get the best cash value returns. The maximum age on cover is 70 years.
• The policy has flexible, regular premium contributions which you can make monthly, quarterly, semi-annually and annually, payable throughout the policy term. The premium starts at KES 3,000 per month.
• Akiba has a guaranteed lump sum payable on maturity of the policy which is funded by regular premiums.
• The policy offers terms of between 5 and 12 years, which the policyholder selects during policy inception.
•  When enrolling you can choose to go for a medical checkup or not. If you opt for a medical checkup, the sum assured you will receive at maturity is not capped. If you choose not to go for medicals, the sum assured you receive as the maturity payout is capped at KES 15,000,000.
• In the event of death, premium contributions are waived, and the sum assured or the maturity benefit is paid to the beneficiary maturity.
• If you had placed an optional death benefit, an instant payment is made when the death occurs, equivalent to the sum assured and the maturity payout is made when due.
• You can only opt out of this arrangement after 2 years where you shall receive a cash surrender value determined by the insurance underwriters. You can also choose a paid-up option, where you let the premium already contributed sit with the insurer and be paid together with some returns when the policy term ends. In this instance, you receive a lesser sum assured.

Why should you enroll in Britam Akiba Endowment Plan

• The plan offers high savings returns for people below 50 years compared to many to other savings insurance policies. Akiba offers the policyholder a guaranteed return of up to 7% net rate even when the market conditions are in turmoil, which is higher than what typical savings insurance products return.  
• Akiba has low policy terms with a minimum term of 5 years and a maximum of 12 years.  
• The product is designed with the policyholder in mind as it is easy to understand its structure and terms
• The policy allows for high entry ages of up to age 65. Most endowment policies allow a maximum entry age of 55 years.

Disadvantages of Akiba Endowment Policies

• The policy is not suitable for people with low and unsteady income. The minimum premium contribution is KES 3,000 and just like any other endowment policy, you must make the premium contributions as per the defined payment schedule.
• Akiba is not suitable for people above 50 years. It has lower savings returns due to the risk involved with age.
• The policy could have higher savings periods. The maximum savings period (policy term) is 12 years.

If you are 50 years and below, I urge you to really consider the Akiba Endowment Policy. It gives very fair returns and you can use it to save for school fees, or build a fund to meet your short and long-term goals, including retirement fund.

2. ICEA Lion Endowment With Profits

ICEA Lion Endowment with Profits is a savings life insurance plan where you receive a single lump sum payout at maturity.

Key Features of ICEA Lion Endowment With Profits

• The plan offers a guaranteed single lump sum payout at maturity.
• The plan minimum regular premium contributions is KES 2,000 and offers flexibility where you can choose to make your contributions monthly, quarterly, semi-annually, or annually.
• It offers life insurance protection including death, permanent disability cover, critical illness covers and last expense.
• You can access a policy loan after the policy is in force  for 3 years.
• You can add additional benefits besides the built-in including disability, death, and critical illness covers.
• If your income changes due to unforeseen circumstances, you can opt out after 3 years since policy inception through a cash surrender value which is determined by the insurance underwriters.

Why should You Enroll in ICEA Lion Endowment With Profits Plan

• The plan is quite affordable starting at KES 2,000 monthly premium contributions.
• The policy allows a lot of flexibility where you can choose to make your premium contributions monthly, quarterly, semi-annually, or annually. Again, if you had picked high premium contributions and income shrinks, you can reduce it to lower contributions down to KES 2,000.

Shortcomings Of ICEA Lions Endowment With Profits

• The policy requires regular premium contributions without failure. This makes it unsuitable for people with a shaky income.

ICEA Lion Endowment With Profits is suitable for short and long-term goals.

3. Fanaka Investment Plan

Despite the word investment, Fanaka Investment Plan is an endowment policy that combines life protection with a savings plan.

Fanaka Investment Plan Key Features

• The plan pays a single guaranteed lump sum amount at maturity.
• The plan term (savings period) is between 5 and 20 years.
• To enroll, the entry age is between 18 and 65 years old, and the maximum age on cover is 70 years.
• The policy allows a minimum sum assured of KES 350,000.
• Cash surrender value is offered after 5 years if the policy term you picked is between 5 to 10 years. If you picked a policy term between 11 to 20 years, the cash surrender value is allowed after 3 years.
• You can take a policy loan with this plan against your savings.

Why Should You Enroll in Fanaka Investment Plan

• You will get a guaranteed maturity payout at the end of the policy term.
• The plan has a high maximum savings period of 20 years, you can save for a long period of time to achieve your goal.
• The policy has a high entry age such that it can accommodate many people of different ages.

Shortcomings Of Fanaka Investment Plan

• The policy is unattractive because of the strict opt out conditions. The cash surrender value opt out option is set at 5 years and 3 years for terms between 5-10 years and 11-20 years respectively. This is not suitable for financially struggling policyholders.
• The minimum sum assured is KES 350,000 meaning it is not suitable for low income earners.
• The policy is complex to understand and can bring confusion.

Fanaka Investment Plan can help you save, but not suitable if you start struggling financially.

4. Old Mutual Hakika Savings Plan

Hakika Savings Plan is an endowment policy by Old Mutual that offers an extra long savings period of up to 43 years.  

Hakika Savings Plan Key Features

• The plan has a policy term of between 5 to 43 years and the policy term you can pick is determined by your current age.
• Hakika Savings Plan accommodates people between the age of 18 to 55 years.
• The policy minimum premium contribution is KES 2,500. You can make your premium contributions monthly, quarterly, semi-annually, or annually.
• With this plan, the policyholder receives a lump sum single payout at maturity (end of the policy term).
• The policy features death and disability covers and the premium contributions are waived in the occurrence of these two events.
• You can add death benefit and life cover as riders (optional benefits).

Why Should You Enroll in Hakika Savings fPlan

• The policy offers a very long policy term of between 5 to 43 years. This means you have a long saving period that you can use to achieve any goal.
• Hakika Savings Plan has adequate insurance protection against death and disability.
• The starting premium of KES 2,500 is considerably moderate, giving many a chance to save for their short and long-term goals.

Disadvantages of Hakika Savings Plan

• Low income earners or people with shaky income may not be able to save under this savings plan.
• The entry age of between 18 to 55 years is not wide enough and may lock out many people willing to save.
• Hakika Savings Plan may not have considerable savings returns like some of the endowment policies in this list, one being Akiba.

Hakika Savings Plan is a good plan for savers even if it is not the best in saving returns.

5. APA Insurance Imarika Fixed Saving Plan

Imarika Fixed Saving Plan is offered by APA Insurance and is a short to long-term endowment policy.

Imarika Fixed Saving Plan Key Features

• The plan has a policy term of between 5 to 20 years.
• It offers a single, guaranteed lump sum at maturity (end of the policy term).
• The entry age is between 18 and 65 years, and the maximum age on cover is 70 years.
• The Imarika plan features a death cover.
• You can add additional insurance protection including protection against permanent disability, accidental death, critical illness, waiver of premium due to disability, medical reimbursement in case of an accident, and retrenchment in case of loss of employment.
• The regular policy premium contributions can be paid monthly, quarterly, semi-annually, or annually.
• After 3 years, you can opt out through a cash surrender value determined by the underwriter or a paid-up option where you let the money sit with the insurer until maturity of the policy.
• With this plan, you can take a loan against the policy cash surrender value.

Why Choose Imarika Fixed Savings Plan

• The policy accepts a wide range of age groups from 18 to 65 years.
• The policy term is adequate to even save for the most cash-demanding long-term goals.
• Imarika Fixed Savings Plan allows you to take up a policy loan to attend to emergencies.

Shortcomings of Imarika Fixed Savings Plan

• The policy opt out period of 3 years either through cash surrender value or paid-up option is too long. Financially struggling policyholders may lose their savings as a result.
• Most of the plans’ insurance protections are not built-in, they are optional hence attract some more charges reflected on the premiums once selected.

If you choose to go with this plan, ensure you are financially stable and you will pay more for better insurance protection.

6. Madison Money Max Plus

Money Max Plus is a cash value life insurance policy by Madison that combines life protection with investment/savings.

60% of the regular premium contributions you make goes to life protection while the remaining 40% goes to building a fund that is invested to meet your future goals, with guaranteed return of 5% p.a. and a management fee of 2% p.a.

Money Max Plus Key Features

• The endowment policy has a policy term of 8 to 15 years.
• It guarantees a return of 5% p.a and a management fee of 2% p.a.
• With this endowment policy, you can decide to take a single lump sum at maturity of the policy term or staggered payouts (survival benefits equivalent to 20% of the sum assured) within the last 4 years of the savings period.
• Money Max Plus has a death benefit of 100% sum assured and a last expense of KES 20,000.
• The plan offers a permanent disability rider/option bought at an extra cost.

Why Choose Money Max Plus

• It gives an option to wait up to maturity to get the payout or collect early. For people struggling financially, this is a good option.

Shortcomings of Money Max Plus

• This plan smells very low returns everywhere. Look at how your premium contributions are shared (a whooping 60% goes to life protection), the guaranteed return rate of 5% p.a., and a management fee of 2% p.a.
• The minimum policy term of 8 years is too long for short-term savers.

Madison Money Max Plus is for savers who care more about life protection than saving returns, and they do not want to turn their head and look for better solutions.

In a separate article, I have covered the best education life insurance plans. If you are interested in education policies, you can go to the article for guidance.

To keep this article neat and clear, in my next articles, I shall cover:

• Best Term Life Insurance in Kenya
• Best Whole Life Insurance in Kenya
• Best Education Life Insurance Plan
• Best Investment-Linked Life Insurance
• Best Family Protection Policy

In this write-up I have put much focus on the top endowment policies in Kenya, comparing them so that you can make an informed decision.

In the next articles, I will equally focus on other life insurance policies.

For any question or comment, reach out to me via the provided phone number or put your inquiry in the comments section.

See you in the next engagement.