By Vincent Munga.
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.
Speaking during the launch, Retirement Benefits Authority CEO, Mr Nzomo Mutuku said,”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.”
Sanlam Life Acting CEO Mr Kevin Mworia said the product will be reflected heavily on the Sanlam distribution avenues and delivery channels which will also be anchored on the innovative information technology solutions including biometric identification.
Minet Kenya Managing Director Mr Sammy Muthui 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.