Insurance 101: A Beginner’s Guide to Understanding Insurance.

Demystifying Insurance

Introduction to Insurance 101

Welcome to the blog of Demystifying Insurance 101. Insurance is a promise where Madison promises to pay our clients in the event they suffer a loss. For instance, if it is an asset like a motor vehicle, the client pays premiums. In the event that the client suffers an accident or the vehicle is involved in an accident and there is either total loss or partial loss.

Who Needs Insurance?

Who needs insurance? What is insurance? I need insurance, you need insurance, all of us need insurance. From a CEO of a big company to a everyone, all of us need insurance for different reasons.

What is Insurable?

So, what is insurable? Anything that is of value to you, ranging from your property, let’s say Car, house, your loved ones, your health, your children.

There are two types of insurance:

• General insurance
• life insurance.

General Insurance

General insurance entails short-term insurance that covers your property. I mean, Cars, House, Businesses, and focus. You have motor vehicle insurance covers where you can take, yeah, that party insurance or comprehensive. We have for your health, we have your medical covers for your health. For property or under business, we can cover you. You can cover all the properties that you have, your assets, your employees, and also your own personal properties, including your phones, your laptops, everything that you have in your house.

Life Insurance

Life insurance entails, rather, it is a cover for individual persons against unfortunate events such as disability, critical illness, and death. In the event that these unfortunate events occur, then your loved ones are able to continue with the education. If you had a house on mortgage, then your family is able to continue living in the house without the worry of being without shelter. In the event that you have a loved one or your spouse, then your spouse is able to continue being able to meet their financial obligations.

The Role of an Insurance Company

• The role of an insurance company is to lift the burden from the community
• Insurance helps individuals recover from unforeseen events
• Individuals are restored or compensated without bearing the full financial cost
• Insurance provides employment opportunities within communities
• Recently, insurance has expanded to cover issues like climate change
• Farmers, for example, can be compensated for low crop yields

Classes of Insurance

• To begin with, the compulsory classes of insurance in Kenya include:
• Firstly, motor vehicle insurance
• Secondly, workplace injury benefits
• Thirdly, personal accident cover, especially in engineering and technical fields
• Moreover, all these covers are offered by Madison
• In addition, there are other statutory requirements such as:
• Namely, NHIF (National Hospital Insurance Fund)
• And, NSSF (National Social Security Fund)
• Typically, NHIF and NSSF contributions are deducted from the salaries of employed individuals

Terms of Insurance 101

The general public and clients actually have challenges with some of the terms that the insurance use. Would you kindly clarify some of those terms? Some of the terms include insured, who basically means me and you and anyone else purchasing the insurance by being, making a contribution which you call premium, and get the cover which we call the policy.

People Involved in the Insurance Business

• People involved in the insurance business are known as partners in insurance transactions
• These partners include agents and brokers
• Agents and brokers are licensed by the Insurance Regulatory Authority
• Agents are individual salespersons
• Agents are appointed by insurance companies
• Their role is to present and sell insurance products to individual clients

Brokers, on the other hand, are corporate licensed insurance dealers that are usually appointed by clients to seek insurance services from insurance companies on behalf of those clients. Now, you will note that insurance agents are common with individual clients, while brokerage companies are common with corporate clients and companies and even government entities such as ministries.