August 29, 2013   by

The main purpose of any Chama is to pool money together for a common goal. In view of this, it is imperative that members have a source of income. Either from business or formal employment. Some Chamas constitute of those in formal employment only, business only or can be a mix of both.

It is a known fact that those in formal employment enjoy greater security than those in business as they have a regular, predictable income that they can count on at all times. Persons in formal employment rarely default on their financial obligations due to the stability of their income. But, what happens if a mishap happens. A sudden job loss, accident or even death? How will your Chama be affected if this happens to one or two people in the group?

Many times Chamas get overburdened and cannot cope with filling in for the people who are now unable to make their contributions. For instance if someone is ill and cannot work thus has no income, she ends up being removed from the Chama and someone else is put in to replace her as she can no longer contribute. A few months down the line, when she gets better, she has to start all over again with another Chama, whilst she would have just continued with her old Chama if she had protection. That’s where Salary Protection Cover comes into play.

This insurance cover is now available locally and it shields employment persons from the vulgarism of a sudden loss of income. This cover comes to the aid of workers who are unable to earn their normal earnings due to illness, accidents or retrenchment. In common, individuals depend on their earnings to meet normal economic demands. The sudden loss of a salary can lead to an economic crisis, with devastating effects. You can get this cover from Jamii Bora Bank who have partnered with CIC Insurance Company to offer this cover. Melanie Nganga at this bank gives some pointers on what to expect.

The policy covers you in case of an accident, retrenchment or even death. In the case of death your next of kin will be paid the equivalent of your monthly salary for a period of one year. If you had any outstanding loans in the Chama, you family can easily offset this for you without feeling overburdened. In case of an accident, you will be paid an equivalent of your monthly salary for a period of one year as you recuperate. This way, you can meet your Chama obligations as usual without experiencing financial worries thus focus on getting better. In case of retrenchment, you will be paid the equivalent of your salary for six months. Thus you will be able to meet our Chama contributions even though you are not working and it can cushion you as you look for another job. Claims are paid fairly fast as funeral benefits are paid within 48 hours and for retrenchment and injuries, within seven days.

Melanie is quick to point out that this is not a health insurance; it is not cover against you incurring medical expenses, rather it is cover against you being unable to work and earn a salary. It is arguably more important as you use your salary to pay your health insurance premiums.

To enjoy this salary protection policy, one is required to open an account with the bank where her salary will be processed. Once you have the account, then you can sign up for this policy at the bank, and you will be required to pay a small premium of 0.5 percent of your salary for the last twelve months. For instance if you earn Kshs.10, 000 per month. For a whole year is Kshs.120,000/-. The bank will calculate 0.5% of 120,000 which works out to only Kshs.600/-. This is something that anyone can easily afford to safeguard their income.

This is one avenue toward prosperity, as you protect you and your Chama members from sudden loss of income thus you can pursue your goals with confidence that you will be able to meet them every time.

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