ICEA LION’s ANTICIPATED ENDOWMENT 

What Is An Endowment?

The term endowment is tossed around quite a bit, yet it is unclear to most people what it actually means!  Despite the complicated name, an endowment is a type of life insurance where you make monthly or periodical payments and you get a guaranteed payout after a specified period of time, i.e. when the policy matures or in the unfortunate event of your demise. Some endowments even pay out in the unfortunate event of your incapacitation or if you are diagnosed with a critical illness. Typical maturity periods for endowments are ten, fifteen or twenty years, up to a certain age limit.

 

Endowment is a type of life insurance where you make monthly or periodical payments and you get a guaranteed payout after a specified period of time, i.e. when the policy matures or in the unfortunate event of your demise. Some endowments even pay out in the unfortunate event of your incapacitation or if you are diagnosed with a critical illness. 

Typical, maturity periods for endowments are ten, fifteen or twenty years, up to a certain age limit.

 

What Is An Anticipated Endowment Policy?

 

An Anticipated Endowment is an insurance policy that gives you a platform to grow your savings by making regular payments (premiums) over a specified period of time. An Anticipated Endowment policy is suitable for anyone who wants to save up for a long-term goal, but still wants to enjoy interim rewards to take care of short term goals.

 

Anticipated Endowment policies give you a set number of payouts over the duration of the policy. It is also important to note that an Anticipated Endowment policy is essentially a life insurance policy, which means that the Sum Assured and bonuses (both of which combined are known as maturity benefits) are payable to your nominated beneficiaries in the unfortunate event of your demise. Endowments grow your savings because the potential bonuses you gain are derived from the interest accrued from the investments made on your behalf by the insurer

 

This is an insurance policy that gives you a platform to grow your savings by making regular payments (premiums) over a specified period of time. It is suitable for anyone who wants to save up for a long-term goal, but still wants to enjoy interim rewards to take care of short term goals by giving you a set number of payouts over the duration of the policy. 

In essence, this is essentially a life insurance policy, which means that the Sum Assured and bonuses (both of which combined are known as maturity benefits) are payable to your nominated beneficiaries in the unfortunate event of your demise. 

Endowments grow your savings because the potential bonuses you gain are derived from the interest accrued from the investments made on your behalf by the insurer. 

 

What Are The Key Benefits Of Our ICEA LION Anticipated Endowment Policy?

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  1. Payout in 3 installments: The frequency and percentages that are paid out with each installment in an Anticipated Endowment vary from company to company. At ICEA LION, the first payout is 20% of the Sum Assured, the second payout is 20% of the Sum Assured and the final payout at maturity is 60% of the Sum Assured plus the accrued bonuses. However, it is important to note that the amount that is guaranteed to be paid out is your Sum Assured. The bonuses are paid out subject to market performance during the duration of your policy.

 

Our payout structure is as follows:

  • The first payout: 20% of the Sum Assured
  • The second payout is 20% of the Sum Assured 
  • The final payout at maturity is 60% of the Sum Assured plus the accrued bonuses. 

*However, note that the amount that is guaranteed to be paid out is your Sum Assured. The bonuses are paid out subject to market performance during the duration of your policy.

 

The illustration below demonstrates how you would be paid out if you took a 10 year Anticipated Endowment at a cost of Kes 10,025/- per month. The Sum Assured would be 846,937 and the possible maturity value Kes 1,355,099.20/- 

  1. Eligibility for full Sum Assured Payout is immediate: A very special feature of this endowment policy is that once our contractual agreements are finalized (including payment of your first premium installment), in the unfortunate event of your demise, we will pay out the full Sum Assured to your nominated beneficiaries immediately. You should however note that we will deduct the amount commensurate with what you would have paid for as a full year’s premium – from the final dues – if you had not paid up for the full first year.

 

A very special feature of this policy is that once our contractual agreements are finalized (including payment of your first premium installment), in the unfortunate event of your demise, we will pay out the full Sum Assured to your nominated beneficiaries immediately. However, please note that we will deduct the amount commensurate with what you would have paid for as a full year’s premium – from the final dues – if you had not paid up for the full first year.

 

  1. Affordability: In the unfortunate event you lose your source of income, you can reduce your premium payments up to Kes 2,000/- and you can later revise them upwards when your circumstances improve
  2. Flexible payment options: You can opt to pay premiums monthly, quarterly or annually which is suitable for self-employed as well as salaried employees
  3. You can add on additional benefits (Riders): At a minimal additional fee, you can boost your policy with a rider to your existing policy. These include disability rider, accidental death, waiver of premium for unfortunate events such as loss of income, critical illness and last expense (funeral benefit). 

This can be done at any stage of the policy; it does not have to be done at inception. 

  1. Contribution Break (Re-Dating): If you are unable to continue paying the premiums for your policy, you can pause payment of your policy and restart when your circumstances improve, at no extra cost. This is known as re-dating. Other organizations may charge a fee on the arrears, however we do not charge at ICEA LION. You can however only re-date once. However, this can only be done once.
  2. Policy Loan: You can take a loan against your premiums from year 3 (36 months of contributions) and the loan amount is dependent on the value of your policy at that time not the Sum Assured.
  3. Tax-Free benefit: Upon maturity, the Sum Assured will be paid to you Tax-Free When your policy matures, you will get the full Sum Assured paid to you Tax-Free. 
  4. 15% tax relief: If you are employed and you advise your HR department about your policy, you get a 15% tax relief each month. If you are self-employed you can claim the same from Kenya Revenue Authority (KRA).
  5. Guarantee Income for Your Loved Ones: In the unfortunate event of your demise, your nominated beneficiaries can still have the quality of life you envisioned for them as long as you set up the proper structures in place. That said, it is very important that you ensure you have structures in place to ensure that the people who are left in control of your funds use it as you desired. In order to protect your legacy for your intended purposes, it would be advisable to consider Estate Planning and perhaps set up a Trust. Click here to find out about out ICEA LION Milele Trust

 

What Happens If I Cannot Pay My Premium?

 

Life Happens! If for one reason or another you are unable to pay your premiums, you can opt for either of these options:

  1. Take a Contribution Break (Re-Dating):  As mentioned above, you have the option to Re-Date your policy and you can resume your payments once your circumstances improve. The policy period will be revised to suit your new circumstances.

 

You have the option to Re-Date your policy and you can resume your payments once your circumstances improve. 

The policy period will also be revised to suit your new circumstances.

 

  1. Reduce Your Premium: You have the option to reduce the premiums you pay to a minimum of Kes 2,000/- per month and keep the policy active. This will result in either a reduced maturity amount (if you stick to the original policy duration) or an extended policy duration 
  2. Accept an Automatic Premium Loan: ICEA LION We will deduct the amount of outstanding premium from the maturity value of the policy which will have been given to you in form of a loan as monthly premium. After 3 months of non-payment, we automatically take up this loan on your behalf, referred to as an Automatic Premium Loan (APL), in order to keep your policy active. This can remain in effect for several years, so it is important to engage us on your options as this facility erodes the final dues paid to you at the end of contract. This facility only applies if you have been saving for over 3 years (36 months).
  3. Surrender The Policy after 3 Years: If you have paid up for more than 3 years (36 months), your policy will have attained what is called surrender value and you will be able to terminate your policy. However, you should note that due to the fact that your funds had been invested in a longer term financial instrument and you are pulling out and also because funds have been utilizing in servicing the policy, you will be paid an amount that is potentially less than what you have contributed. 

 

What Is The Difference Between Anticipated Endowment & Endowment With Profits

 

An Anticipated Endowment may be confused with Endowment With Profits. They are similar products however; they are differentiated on 2 key features:

 

  1. The Anticipated Endowments has partial payouts throughout the duration of the policy whilst the Endowment with Profits has one lump sum payout at the end of the policy term.
  2. Due to the above mentioned structure, the final payout for Endowment With Profits is higher than that of an Anticipated Endowment. Long term investments are more likely to yield higher returns because one can invest in more profitable financial instruments. Below, is a comparison of a saving with Anticipated Endowment and with Endowment with Profits with the same monthly premium. The difference in the final maturity payout is about Kes 400,000/-

 

      Anticipated Endowment   Endowment with Profits

 

Click here to learn more about ICEA LION’s Endowment With Profits Policy. 

 

To help you along, click here to watch a video that explains how you can decide on the ideal investment to make in light of your investment goals.

 

Now that you understand the basics of our ICEA LION Anticipated Endowment would like to insure with us, click here to get a quote. If you would like to talk to us in person, you can call us on +254 719 071 999 or request a call back by clicking here.

 

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