INSURERS LAUNCH RETIREMED

INSURERS LAUNCH RETIREMED

By Patience Chemjor

Sanlam Life and Minet Kenya 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.

Speaking during the launch, Retirement Benefits

Authority CEO, Mr Nzomo Mutuku lauded the

introduction of the product in the market as it

addresses a clear gap from a retiree’s

perspective, which is access to quality

healthcare in the golden years.

“Additionally, the flexibility of RetireMed to

accommodate any individual including the

informal workers is in line with the RBA

Strategic Plan 2019-2024 with a focus on of

bringing more individuals in the informal sector

under a retirement benefits scheme. It also

plays a key role at a macroeconomic level in

securing national savings mobilized through

the pensions sector.” Mutuku said.

Sanlam Life Acting CEO Mr Kevin Mworia noted

that 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.

He added that: “The product will be reflected

heavily on the Sanlam distribution avenues and

delivery channels which will also be anchored

on our innovative information technology

solutions including biometric identification.”

Minet Kenya Managing Director Mr Sammy

Muthui on his part noted that: “The

contributions are inclusive and can target a

specific level of medical cover at retirement.

Members can choose various outpatient and

inpatient covers that best meets their needs,

and we will be able to advise on the required

regular contributions.”

He added that “Contributions into the

RetireMed Fund will be invested separately

from the assets of the Umbrella scheme. This

investment strategy will be relatively lower risk,

to ensure that the contributions are not exposed

to a lot of volatility in the investment markets.”

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.

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.

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.