For the longest time, our older generation has been shunned by insurers in matters medical insurance. And yet this is a generation that really needs medical insurance as their health more likely than not takes a downward turn due to age. It is only right that they have access to quality healthcare in the golden years.
It is also this generation that does not have as much energy to take part in economic activities and therefore they do not have disposable income with them. Statistics show that less than 10% of people retire financially independent. There are many reasons for this, one being that when saving for retirement, people underestimate how much they’ll have to pay for medical expenses during their retirement years.
To cover this glaring gap, Sanlam Life and Minet Kenya have launched an innovative post-retirement insurance product dubbed RetireMed, which is designed to assist Kenyans to save for their medical expenses in retirement. The product will provide medical insurance coverage for insurance consumers aged 55 years and above, allowing them to maximize their pension benefits.
RetireMed is set up within the Minet Umbrella Pension Scheme and is underwritten by Sanlam Life insurance. As such, it is fully regulated by the Retirement Benefits Authority, which guarantees that the contributions are eligible for applicable tax reliefs. The product development was informed by Kenya’s life expectancy rate which has been increasing consistently since 2015. As such, the number of retirees in the country is also on the rise.
The RetireMed scheme administers both individuals and group schemes; the entry ages are between 18 years and 59 years. Members have various options to access their funds at retirement, including – accumulated funds at retirement to be used to purchase an annuity from an insurance company. The annuity proceeds are then used to make payments during the life of the member.
Alternatively, the member’s accumulated funds would be transferred to a medical drawdown fund. Payments would then be made from this fund until it is exhausted or the member passes on.
Also, upon retirement, members can transfer up to 10% of their accumulated pension benefits to the RetireMed, to enable them to purchase their preferred level of cover.
In a research note released late last year by the Association of Kenya Insurers (AKI), majority of the respondents to the AKI Kenya Retirement Preparedness Survey2019 confirmed that they were not ready for retirement. Only 29% of the respondents felt that they are well prepared for retirement.
The AKI Kenya Retirement Preparedness Survey 2019 established that the rural population was more prepared than the urban population while the female gender reported being more prepared than the male.