Insurance penetration in Kenya has been very low at below 3 percent of the population. Majority of Kenyans do not have any sort of insurance because of various reasons. Some of these reasons include lack of education on the importance of insurance, myths around insurance, high cost of insurance among others. Some of the myths around insurance are the belief that the processes involved in insurance such as getting claims are too complicated, perceived low rate of returns, failure to understand the importance of insurance, insurance does not cover certain needs among others.
It is important to understand how insurance works and the services offered by insurance companies in your region. This article will therefore help highlight the importance and benefits of insurance.
Insurance, in simple terms, is a way to manage your risk. When you buy insurance, you purchase protection against unexpected financial losses. Some of the most common insurance products are motor insurance, life insurance, health insurance and home/property insurance.
Insurance has numerous benefits, which create a safety net for individuals. Insurance is a part of the risk management tools that contributes to one achieving financial security. It’s not the only one.
Other benefits include:
- Compensation in case of loss
An insurance policy is used to protect individuals and businesses in the unfortunate events of losses. These losses can be due to accidents, theft, natural disasters etc.
- Financial security
Unfortunate events such as illness, injury or death can set individuals back. With insurance, the insured is relieved of some financial stress and burdens during such times.
- It instills a savings culture
In the case of life insurance and other investment products in insurance, the insured is required to pay periodical premiums, which in turn instills a savings culture.
- Reduce social burden
Insurance helps reduce the burden of risks that are associated with unpredictable life events such as illness and the uncertainty to the society. For instance, the last thing you want when you or a loved one falls sick is the stress of paying for medical expenses. Health insurance therefore protects individuals and families from the unexpected, high medical costs.
- Provides comfort
Insurance ensures that the insured is provided with comfort because of the financial security that is present in case of an unforeseen event such as accidents or illness.
Generally, insurance is an essential tool that helps to manage risks in your life, home, health, business and assets. It is important in providing a financial safety net that helps to take care of you and your loved ones when you need it the most.
In conclusion, it is important as a potential customer to compare and evaluate different insurance products and service providers to ensure they are the best fit for your needs and budget. Ensure the company you select is backed by a heritage of excellent customer service and a solid financial background. At CIC Insurance we keep our word.