Can Life insurance guarantee a monthly income after my retirement?

Insurance Company of East Africa (ICEA) CEO John Karionji (C), talks to Ibrahim Kadunabbi Lubega (R) , the Insurance Regulatory Authority CEO and James Ndegwa (L), the chairman board of
directors ICEA during the company’s customer appreciation day held recently. Courtesy Photo.

By Allan Lwanga

Q: Can Life insurance guarantee a monthly income after my retirement?

Yes, in life, we all aspire to live long and see our children and grandchildren grow, there are however risks involved in living too long that can make one’s retirement undesirable. At the point when you retire, you will cease to earn income meaning you must have a fall back plan usually offered by your employer.

Some self-employed people will wonder how this applies to them, but imagine a shop owner in kikuubo having to open his business every morning even at 60, getting involved with suppliers and customers, hiring and firing staff, clearing goods with URA and yet all the while competing with 30 year olds in the same line of business. There is an alternative to this and that is, sit back, relax and pick a pay check every end of month. Many business owners have a succession plan usually in the form of a son or a daughter to take over but this is the time the same successor wants to start building their own life instead of working to fund your retirement.

Pension plans are for us all, salaried or self-employed. Uganda Bureau of Statistics indicates that in 2010, 79% of Uganda’s working population was self-employed hence only 21% have either a government pension or NSSF. This poses a big risk for the self-employed because while others will be retired picking a pay check every end of month, these people will still need to wake up early to go open their shop, dentistry or law firm. Some will invest in property rentals which is a sure and safe way to go but it is expensive hence not a guarantee for every business owner.

Anyone can set up a personal pension plan using life insurance. This service is offered by an insurance company and allows an individual to make small progressive deposits to your account usually at a guaranteed interest rate. You have the ability to determine how much you want to put away whether weekly, monthly quarterly etc.