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INSURANCE

When I started my career in insurance distribution, most conversations felt like talking to a wall. I’d mention premiums, policies, risk assessments—and people would smile politely, their eyes slowly glazing over. To them, it was just another sales pitch from a salesman pushing something they didn’t think they needed.

At first, I chalked it up to disinterest. But one morning, all that changed.

I walked into an office to meet an elderly gentleman. He had just finished reading the dailies, sipping his morning tea in an unhurried manner that only comes with age and experience. I started with my usual pitch, but before I could go further, he chuckled and said, “Son, I’ve lived long enough to know life hands out surprises. Some sweet. Some bitter.”

That moment shifted everything for me. I realized insurance isn’t about products or paperwork—it’s about people. It’s about stories.

  • The farmer whose crops didn’t survive the drought.
  • The young couple rebuilding their home after a fire.
  • The taxi driver who made sure his children were cared for even after he was gone.
  • The accountant who realised theory is different from practice
  • The Techie whose server crashed and he didn’t have the most recent database back up

So, I changed my approach. I stopped throwing around jargon and started telling real-life stories—of hardship, resilience, and real protection. I spoke about life’s uncertainties and how preparing today can mean peace of mind tomorrow.

And gradually, the polite nods turned into thoughtful questions. The scepticism became genuine understanding. People began to see insurance not as confusing gibberish, but as a safety net—a ready umbrella when the rain inevitably comes.

That same elderly man leaned back, looked me in the eye, and said,
“Alright, son. In 15 minutes, tell me the best way to retire on an income like the one I earn today.”
And just like that, I knew I was making a difference….

Top 10 Essential Insurance Terms

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1. Premium

 This is the amount of money you pay regularly (monthly, quarterly, or yearly) to keep your insurance cover active. Liken it to a subscription fee for protection. Just like you pay for Netflix, Showmax, DSTV to name but a few…to watch movies, you pay a premium…to keep your subscription active.

2. Excess

This is the amount of money you need to pay first before the insurance company settles the claim costs. Imagine you have car insurance with a deductible of KE.5,000. If you get into an accident that costs KES20,000 to fix, you pay the first KES.5,000, and your insurance covers the remaining KES.15,000. To avoid this inconvenience, you pay a small premium called excess protector.

🔹 Excess Protector: If you had paid extra for this when taking out your policy, the insurer would waive that excess, meaning they cover the full amount from the first shilling.

Why Do Insurers Have Excess/Deductibles?

  • i). To Prevent Small Claims: If insurance covered every single scratch or flu treatment, premiums would skyrocket.
  • ii). To Encourage Responsibility: Policyholders have some ‘skin in the game,’ discouraging reckless behaviour.

In a nutshell, this is employed in order to keep premiums affordable.

3. Claim

Claim – A request you make to the insurance company asking them to pay for a loss you’ve incurred. If your car gets involved in an accident and is damaged, you file a claim to get the car repaired.

4. Coverage

This refers to what the insurance actually protects. If you have health insurance, it covers hospital bills, medication, and doctor visits. If you have car insurance, it covers damages to your car or someone else’s car in an accident.

5. Policy

This is the agreement or contract between you and the insurance company. It has all the details about what is covered and what is not, how much you pay, and how much the insurance company will pay when a claim arises.

6. Beneficiary

The person who will receive the insurance payout if something happens to you. In life insurance, this could be your spouse, children, or anyone you to have a share of your wealth.

7. Exclusions

These are items that your insurance policy does NOT cover. For example, a car insurance policy might cover accidents but NOT regular wear and tear or mechanical breakdowns!

8. Underwriting

This is the process the insurance company uses to decide how much your premium will be, based on the risk involved. If you’re insuring a house in an area with frequent floods, you might pay more than someone living in non-flood area because your environment carries a higher risk of damages.

9. Grace Period

The extra time you get to make a late payment without losing your insurance. If you forget to pay your premium on time, you might have a few days before they cancel your policy.

10. Act of God

This refers to events that happen naturally, like earthquakes, floods, or hurricanes, which can cause damage. Some insurance policies cover these, but others don’t—so it’s good to check.

This could also be the initial period after you sign your policy – you are normally given a lookin (test-drive) period as you peruse your policy document to make a final decision.

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