I have been a member of a deposit taking sacco for many years and was recently surprised to learn that we have a silent life cover payable to beneficiaries upon our passing on. Why is this safety net silent and how are the benefits activated?
According to Sacco Societies Regulatory Authority, there are 176 licensed Deposit-taking Saccos in Kenya as of March 2024.
Over the years, saccos have played a critical role in advancing access to financial services by offering tailored savings and credit products at competitive interest rates.
Beyond the fundamental responsibilities that saccos fulfil, they often offer additional, understated benefits such as life cover policies.
These supplementary services, though not prominently advertised, provide a crucial safety net that can greatly assist beneficiaries in times of need.
Thus, the impact of saccos extends far beyond their principal operations, that contribute to the overall financial well-being of their members.
Why is the life cover silent?
These life covers are often part of a group policy that are negotiated by the sacco with an insurance provider.
Upon enrolling as a member of the sacco, one automatically qualifies for the life cover policy without facing any extra burden of additional paperwork or paying any premium.
Insurance is predominantly regarded as a collective reservoir of funds, representing an advanced mechanism for risk management.
Policyholders contribute premiums into this shared pool, from which claims are disbursed in the event of loss or damage.
This system thereby ensures security and protection for all sacco members. It’s a collective safety net, binding members together beyond their individual accounts.
Saccos primarily focus on savings, financial empowerment, and credit services.
Highlighting supplementary benefits such as life insurance may draw attention away from these essential services.
Thus, keeping it silent guarantees that members remain focused on the main offerings.
Saccos typically function with a streamlined administrative framework.
Maintaining certain benefits, such as life cover discreetly helps reduce operational complexities.
Consequently, this allows saccos to deliver focused and effective service, maintaining simplicity in their operations while safeguarding members' interests through understated yet valuable benefits.
What are the benefits covered?
Death Benefit. This is payable upon the ultimately death of a member to the nominated beneficiaries.
Funeral Benefit. This benefit is usually paid out within 48 hrs to the beneficiaries of a deceased member upon his/her death to assist the family with defraying the burial expenses.
Permanent total disability. The benefit is payable when member is permanently and totally disabled or incapacitated.
How are the benefits activated?
In the event of the death or disability of a member, this safety net kicks in to alleviate the loss of the affected family.
The process begins once the saccohas been notified of a member’s passing or disability. This can typically be done by a family member or legal representative.
Verification and processing of the claim is the next step in activating the life cover. This includes:Claim documentation. The beneficiaries will be required to submit supporting documentation for review.
Such documents include death certificate, identification documents, comprehensive medical reports for disability benefits and burial permit for last expense.
The documents provided will depend on the benefit and the insurer’s requirements.
Claim analysis. The sacco’s administrative team will analyse the documents provided and cross check with their records to ensure the validity of the claim.
Beneficiaries. Members are periodically advised to update their list of beneficiary form to avoid any complication arising during the claim processing and the payouts are made to the rightful and intended beneficiaries.
Payment of benefits. Once the set criteria for claims processing have been met, the sacco will disburse the funds to the beneficiaries.
This can be done through bank transfers or agreed-upon methods according to the sacco’s policies.
While the silent life cover provided by many deposit-taking sacco’s is not frequently marketed, it is nonetheless a vital benefit that can give financial support to your beneficiaries.
Understanding how to activate this benefit and constantly engaging with your sacco will guarantee that this silent safety net, works successfully.
