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Personal Finance

Why you need life insurance more than ever

The escalation of lifestyle diseases has
The escalation of lifestyle diseases has brought into sharp focus, the need for life insurance as a cushion against financial risks posed by unexpected death or illness. FILE PHOTO | NMG 

The escalation of lifestyle diseases has brought into sharp focus, the need for life insurance as a cushion against financial risks posed by unexpected death or illness. The rising prevalence of non-communicable diseases — cancer, hypertension, diabetes, stroke — has a double impact on human productivity and longevity.

A good number of people suffering such serious ailments are at their prime. This implies they are at an age when they should be investing and planning for retirement. Unfortunately, debilitating illnesses like cancer are not known to respect age. Although age is a risk factor in certain types of cancer, the disease invariably strikes individuals irrespective of their age, gender or social status.

Cancer and other non-communicable diseases have become fairly commonplace today. This poses a major challenge considering the negative impact on productivity (with extended absence on medical grounds) and tends to shorten lives especially if not detected early enough.

Most of the productive workers in their prime have young families that depend on their income to meet their basic needs. This implies that in the event of the death or serious illness of the breadwinner, the family is rendered financially destitute.

Indeed, many families have been impoverished by the sudden illness of their breadwinner. This is precisely the reason why we have to encourage more Kenyans to take out life insurance policies — right from the time they start working. However, a life insurance policy should not be viewed in the context of death alone.

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It should be considered a financial tool to help manage life’s risks, plan for retirement and create future wealth and security for families.

Treating illnesses like cancer, for instance, is a protracted and expensive affair.

This tends to amplify the financial risk of such illnesses. It makes sense, therefore, to anticipate and plan for the real risk of penury where the breadwinner falls ill and is incapacitated or dies.

To boost life insurance uptake, we have to address certain myths around life insurance. For example, we have to tackle social and cultural fears about contemplating one’s death. Many productive and working individuals tend to shun life insurance either due to ignorance or the fear of being seen as ‘tempting fate’.

A better place to begin is to get people to see life insurance as a journey and not merely an event. The financial benefits are the key selling points. One, life insurance empowers people to save for the future.

Second, it is a savings and wealth creation/planning tool. Third, it provides social stability by cushioning families against financial disruption owing to the death of the breadwinner.

Of course, life insurance policies come with certain terms and conditions. The health of the insured person is one of the primary considerations by the insurer. Therefore, taking out a life policy early in one’s career and still healthy and productive, puts one on a better footing in terms of assessing their risk profile.

In addition, people should be encouraged to embrace healthy habits like good diet and daily exercise since these have been shown to cut the risk of diseases like cancer. Early detection and diagnosis is also paramount.

In a nutshell, the earlier one begins to plan for their future, the better one’s family is positioned to survive any ensuing financial turbulence. You should no longer ignore the health and financial risk posed by non-communicable diseases to you and your family. It’s time you took out a life insurance cover before it’s too late.

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