Endowment Cover

A term life policy pays only if you die during the term, with nothing back if you survive it. An endowment policy combines life cover with savings: it pays your beneficiaries if you die during the term, and pays you the maturity value if you survive to the end.

Some endowment plans pay the whole benefit at maturity, while others pay part of it at set points during the term, for example to coincide with school fees or a land purchase. We help you choose the payout pattern that matches your goal.

Your nominated beneficiaries receive the sum assured, together with any bonuses earned, according to the policy terms, so the goal you were saving for can still be met.

That depends on the riders you add. With a waiver of premium rider, the insurer can continue paying your premiums if you become disabled, so the plan still matures as planned. Some policies also offer critical illness benefits.

Usually, once the policy has been in force for a minimum period, you can surrender it for its surrender value or take a policy loan against it. Surrendering early often returns less than you have paid in, so it is best treated as a last resort.

There is normally a grace period, often 30 days, to pay without losing cover. After that the policy may lapse, or become paid-up with a reduced benefit if it has built a surrender value. Lapsed policies can often be reinstated within a set period.

Yes, and many people do. An endowment policy saves for a specific goal at a fixed date, while a pension builds income for retirement. They serve different purposes and work well together.

Life policies with a term of at least 10 years may qualify for insurance relief under Kenyan tax law, currently 15% of premiums paid up to a set limit. Relief is subject to KRA rules, so confirm your eligibility with your advisor or tax consultant.

Often, yes. Once a policy has built up a surrender value, many lenders and SACCOs accept it as security, and you can assign it to the lender for the period of the loan, subject to the insurer's approval.

Most insurers require a minimum term of 10 years for an endowment savings plan. Longer terms allow more time for bonuses to accumulate and for compounding to work in your favour.

Yes. Some people take out separate endowment policies for different goals — one for education, another for a land purchase — each with its own term and sum assured.

If you stop paying premiums after the policy has been in force for a minimum period, the insurer may convert it to a paid-up policy with a reduced sum assured. The policy remains in force but with lower benefits.

Some insurers offer joint life endowment plans that cover both spouses. Benefits are paid on the first death, and the surviving spouse may continue with the policy or receive a benefit, depending on the plan.

Bonuses are declared by the insurer based on the performance of the life fund. They are typically expressed as a percentage of the sum assured and are credited annually. Once declared, they are usually guaranteed and cannot be taken away.

Some insurers allow you to increase your sum assured at certain policy anniversaries, subject to underwriting and possibly a medical examination. This can be useful if your income or savings goals grow over time.