There is an idea in films and literature called a bucket list, which is all the things a person wants to do before they ‘kick the bucket’, which means before they die. Sometimes there are tales of young children with cancer who get to meet their football hero, or older people who travel the world.
But I think, for most of us, the thing we want most before we go is that when we are no more, it doesn’t devastate our loved ones.
For which among us wants to shoot our children out of education, or our partners out of home and shelter? For sure, bereavement is bad enough and terrible, without inflicting a financial implosion on those we love and care for.
Yet often loved ones lose even the financial support they should get. To whit, one of the worst stories I have heard this year was about a partner of someone I was set to do business with. He had got into bother at the bank he was working at for ‘harvesting’ the surplus of insurance pay-outs on loans held by the now deceased. For most banks take out insurance against loans.
When the borrower dies within the term of the loan, often with part unpaid, the insurance pays out. But it pays out the whole cover booked, not just the amount outstanding on the loan.
The surplus is supposed to go to the borrowers’ estate. That’s because, hidden in the set-up costs of their loan is that insurance premium, so, while the bank gets the pay out to reimburse the loan due, the balance is, in effect, the borrower’s own life assurance pay out.
Right at the outset of the loan, it was the borrower who bought and paid for that insurance, even if they didn’t fully log the sum or the purpose of that particular signed document.Yet few relatives know that the funds are there.
Often, indeed, when someone dies, others don’t even know that they borrowed, or have any paper record. And employing lawyers to act as executors is an expensive affair and really the space, alone, of the super wealthy. So insurance gets paid out and left sat, eventually to move to the government as unclaimed funds.
As it is, we never did work with the insurance harvester, it just sat so badly with me that anyone could be so ruthless as to steal from the bereaved, although I guess he saw it all as unclaimed
Yet, in Kenya, where so very few people have life assurance, apart from those semi-hidden policies on loans, bereavement is nearly always a financial hammer blow.
There is data, indeed, that shows that the untimely loss of a family breadwinner can even push a whole family into poverty for a generation, regardless of where they were living on the socio-economic ladder before death hit.
Even the funeral can set families and relatives back for months or even years, with many having to transport the body of the deceased, as well as pay for the funeral itself.
Yet we don’t really prepare for death, as a rule. Indeed, the Dalai Lama is often cited as observing that most people live as if they will never die. But “it is crucial to be mindful of death -- to contemplate that you will not remain long in this life,” he says.
Which is the moment when insurance actually does make sense. Not insurance that is a way of saving and will pay out anyway. Not insurance for everyday bumps of medical costs or the legal obligation to insure vehicles.
But life assurance, that simply pays out on bereavement, and prevents a single tragedy turning into a double tragedy for years to come: college places lost, education never gained, homes lost, no longer food on the table. It’s hard to pay for cover like that when the daily bills are anyway tough to meet.
But if we ever took a true gauge on the fullest array of all our financial service products, and weighed up the cost involved versus the human misery spared, there would be my own vote. Simply for life assurance.
Jenny Luesby is a journalist and entrepreneur.
The views expressed in this article are of the author.