LSK SACCO BENEVOLENT FUND (LOAN AND MEMBERS DEPOSITS COVER)

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1 LSK SACCO BENEVOLENT FUND (LOAN AND MEMBERS DEPOSITS COVER)

2 INTRODUCTION LSK Sacco rolled out a benevolent scheme starting 1 st January This was after AGM resolution in 2014 mandating the Management Committee to seek out for a suitable scheme that covers members obligations incase of death and also takes care of the beneficiaries. The best scheme that would take care of both the Sacco and member interest was an improvement of an existing loan guard policy that previously covered loans only. The loan guard policy was therefore improved to include deposits in the cover and a last expense cover.

3 OBJECTIVE OF THE SCHEME The insurance premium is intended to cover members' deposits and loans. It ensures that, If a member with a running loan, secured by his/ her deposits or guarantor's deposits or other securities passes on, the loan is not repaid by the attached securities, but by the insurer. The next of kin is refunded 200% of the deposits, plus a last expense fee of Kshs 50,000.

4 MEMBERSHIP TO THE SCHEME 1. Membership to the scheme shall be mandatory to all Sacco members below the age of 75 years and with deposits of above Kshs 11, A member qualifies to benefit from the deposits cover scheme upon the Sacco deducting the prevailing premium every year. 3. A member qualifies to benefit from the loan cover scheme upon payment of a fee of 0.25 % of loan issued. 4. There is no medical requirements i.e. no free cover limit

5 PREMIUM Every member who qualifies to membership of the scheme will pay; An annual premium as set by the Management Committee payable every 31 st of December each year; (Current premium is Ksh. 1,200) 0.25% of any loan issued which covers a loan for its entire duration.

6 CLAIM In the event of a claim arising the dependents shall notify the Sacco immediately and avail the following documents; i. A copy of deceased National ID. ii. Original death certificate (death claim). iii. Physician certificate (disability claim). iv. Burial permit (death claim) The Sacco on receipt of the above documents will lodge a claim with the insurer on behalf of the member.

7 CLAIM PROCESSING Upon a successful claim, LSK Sacco will; 1. Clear any outstanding loans balance in the member account; 2. Pay to the beneficiary i. The last expense of Ksh. 50,000 ii. The deposits in the member account and additional equivalent received from the underwriter In case of claims arising from death the Sacco policy is to pay to the confirmed beneficiary in the confirmed grant issued from a court of law. If the beneficiary is also a member of the Sacco they may opt to transfer the benefit/payment into their own member account(s).

8 EXCLUSIONS (Where a 100% and not 200% of the deposits will be paid and the loan is not covered). i. Members who have attained 80 years at entry; ii. Members who have attained age 75 for total permanent disability; iii. Members whose death or total permanent disability was; a) Was self-inflicted within the first six months from the effective date of coverage; b) Active risks of war (whether war be declared or not), civil war, mutiny, riot, insurrection, rebellion, revolution, terrorism, military or usurped power. c) Participation in any criminal act.

9 EXCLUSIONS CONT.. a) Indulgence in alcohol or drugs not prescribed by a registered medical practitioner. b) Racing, hunting and hazardous sports. d) Aviation other than as a fare paying passenger traveling on a scheduled flight of a recognized airline except while in the course of duty. e) Loans granted contrary to the loaning guidelines, rules and regulations as may be set by the relevant authorities from time to time, Acts of Parliament and anything repugnant to public policy; f) Loan balances arising from default in loan repayment as agreed in the loan agreement form;

10 CONCLUSION The scheme will add value to depositors and motivate members to save more. This will grow members funds in the Sacco and in the long run improve our liquidity. The scheme will also give members piece of mind knowing that their dependents will benefit in case of member s death or permanent disability.