Insurance 'Investment' Schemes

Just stumbled upon the image below. This is a 10yr return on one of those insurance policies sold as investments.

Would you ever save/invest in an insurance policy? Personally, I think insurance is just that insurance. Car insurance, property insurance, medical insurance, I can pay but an insurance life savings cover sijui nini…hapana[ATTACH=full]202667[/ATTACH]. There are always lots of terms and conditions, management fees even when the fund is not making you any money. Factoring inflation, this person actually lost money.

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My highschool business teacher once told us how he had a life insurance policy that was worth several “mirrions” on maturity. Two years after I cleared highschool, I got the news that he was murdered. I’m not saying that had anything to do with it, but that’s what I remembered when I first heard the bad news.

Insurance cover is non-negotiable. If possible, everyone should have medical/dental, life, car/rental insurance and disability insurance. Most of my monthly expenses are taken up by premiums but I persevere, because it’s a form of security.

Scenario 1 : @grandpa contributed Ksh 7500 monthly with britam insurance for 10 years (total contribution of ksh 900,000) and was guaranteed to get a total of Ksh.1,905,821.42 (inclusive the monthly contribution and bonus).

Scenario 2 @Purple being a sweet girl, talked to her sponsor @Abba and told her this : " My gachungwa go to Usiku Sacco Cooperative, take a loan of Ksh900,000.It will be hard for you to make payments but i will come and rescue you as long as you come pat my swelling belly once in awhile.:p.Take it to the moneymarket fund. The minimum you can get annually is an avarage of 10% p.a meaning that in 10 years it will be compouded to Ksh 2,334,369 compare to grandpa’s 1,905,821.42!!!

My love here is why it’s better than insurance investment.
1 You can access your money within 4 days if you want, but @grandpa will have to wait for 10 year to access his hard earned money
2 Your money in moneymarket will flow according to inflation . If Uhuru messes up economy and inflation gets high, then your interest earning will go high,unlike grandpa who will be locked for 10 years and inflation will eat away his savings ending up with nothing.
3 Those money market gurus will be sending you reports monthly on where they are pooling funds to, unlike insurance who are hideous and get big returns only to give you a small dividends in form of bonus
4 The insurance investment have hidden charges."

Now that I have given you a tip , please come rub my belly . It needs to be cuddled. :D:D

Your approach could be a bit off but that’s just my opinion.
This britam plans should be considered as savings not investment.
I don’t know the plan you’ve registered for but back in 2010 they had the 5k per month cash back policies and every four years you get 100k.
At the end of the policy which is about 14years, you’ll have accumulated 1m.
My understanding is this should be a saving not investment.

Papi, what you have demonstrated is that “cash is king” in which case the gamble that us, mortal men, take by getting an insurance cover may not be necessary for you. :wink:

:DIf I’m unable to rub your belly well well, that means you’ll leave me on the hook for a loan that carries an interest rate of 10% plus. I may end up in a worse situation than grandpa…

The type of life insurance you’ve described with Britain has an attractive feature because you can get your money back after an agreed upon number of years. The biggest downside is that it’s more than expensive than a term life insurance policy.

For example, I have a 30 year, $2 million term life insurance policy for $93 per month instead of double that amount ($186) for a return of premium selection.

Insurance is not an investment. Anyone who thinks it is obviously lacks financial education. The only insurance cover that I have is the car insurance which is mandatory,and health insurance (I can’t quantify my health, so the risk is too high to be uninsured). Insurance companies bank on the fact that most “investors” withdraw their money before maturity, effectively making their contributions interest-free capital for the company. It doesn’t matter how you cut it or slice it as you aim to rationalize a bad decision, most insurance policies are unnecessary. Insurance companies buy stocks and property, why not do the same instead of giving them your hard earned money for free?? Beats logic

@Purple just rubbing my belly once a month sio mbaya…just my belly and nothing more
:D.You know insurance works well for you because uko mahali the inflation is stabilized and you can project your future 30 years from today. But what grandpa is referring to ni insurance company in kenya called Britam sio American Mutual. When you have an FDR in kenya unalipwa interest rate ya 10%-12% but hapo kwenu nasikia ni 1.0%-1.5%. So insurance investment kwenu makes sense but not money market. But in kenya money market is more feasible than insurance investment.

Hehehe sawa we shall see about that.

Alafu nani akulipe interest ya 1%? Maybe 0.1%! Heri mattress banking. :smiley:

Btw hii Britam sijawahi elewa. Are they a mutual fund company? Because insurance cover is not a form of investment. What grandpa posted appears to be more of a savings co-op.

No its an insurance company because they cover life , cars et all and at the same time they do investments kama sacco. So confusing . Welcome to kenya

Insurance companies are not just about insurance. Most major insurance companies such as ICEA, britam, jubilee,APA etc are a group of three companies specialising in General(short term), Life(long term) and Asset management as per statutory requirements.
One can invest in the various areas offered in asset management such as money markets but returns are higher if you plough in millions. I know of guys that have invested millions and what they withdraw monthly is the interest accrued the previous month while maintaining their initial investment outlay.

That guy has been conned. On maturity he’s supposed to be given the sum assured which from the computations should be 900k.

So total pay out should be 1.8million

The biggest benefit comes in case of death, your dependants will have a softer landing. Vile @Purple amesema a term insurance is the best. Forget about the investment, think of the security it offers in case of death, disability or terminal illness

After all that…Halafu unakufa. Daaaamn!!!

I took an education policy for my two kids 3 years ago and after just 6 months i had realised how stupid i was…i should have put the money into my sacco instead of the policy. Savings + dividends+ loans kwa sacco instead saa hii nangoja my little savings in 12 years time.

Saving gani hii that’s is beaten by inflation. Si ata afadhali uweke pesa kwa bank ukule 5%

Something is not right with that calculation. Otherwise Paying 900k over 10 years to get a return of 5,800 in 10 years is pretty retarded.

I had joined that plan. My policy was to mature in 2016. Along the road to 2016,I cashed in my policy, and they paid back 480K. After deducting the balance of a 60K loan they had given me against the policy. That was in addition to 200K I had received as cashback.

Kitimba hapa tuko pamoja ,afadhari Sacco

I have a colleague who has saved over 5m in our sacco in about 15 years. This year he got around 450,000 in interest and dividends. I am sure he will educate his kids through his dividends hata wakitaka kusoma hadi Phd.