Affordability of Insurance in Kenya: The Role of Insurance Premium Financing
Can I pay my Insurance in instalments?
Insurance is a critical financial tool that provides protection against various risks. However, the affordability of insurance in Kenya has been a significant concern, with only 20% of Kenyans having any form of health insurance. This blog explores the affordability of insurance in Kenya and the role of Insurance Premium Financing (IPF) in enhancing insurance accessibility.
Affordability of Insurance in Kenya
Insurance penetration in Kenya stands at a paltry 3.1% of the gross domestic product (GDP). This low penetration could be blamed on various factors, including poor saving culture, low levels of disposable income, and negative perception towards insurance.
Despite the government’s efforts to promote socio-economic development and raise Kenya’s status to a middle-income country through Vision 2030, a large population of the country still struggles to afford health services.
Insurance Premium Financing
Insurance Premium Financing is becoming increasingly popular in Kenya as more people look for ways to manage their finances and protect their assets. It is a short-term loan product that allows policyholders to spread the cost of large annual insurance premiums. The insurance company pays the cost of your insurance in one sum directly to your insurance provider, and then the policyholder repays the cost in monthly repayments over an agreed term.
Benefits of Insurance Premium Financing
1. Improved Cash Flow: By spreading the cost of insurance premiums over several months, businesses and individuals can better manage their cash flow.
2. Increased Accessibility: IPF makes insurance more accessible to individuals and businesses that might otherwise struggle to pay a lump sum premium.
3. No Collateral Required: Most IPF providers do not require collateral, making it easier for small businesses and individuals to access financing.
4. Quick Approval Process: The approval process for IPF is usually quick, ensuring that policyholders can secure their insurance coverage promptly.
Conclusion
While the affordability of insurance in Kenya remains a challenge, mechanisms such as Insurance Premium Financing offer promising solutions. By providing a means for policyholders to spread out their premium payments, IPF plays a crucial role in enhancing the accessibility and affordability of insurance in Kenya. Insurance can definitely be made affordable; please reach out and let one of our agents help you spread out your insurance payments into manageable instalments.
