The development of ANAYA post-retirement health care fund by Enwealth Financial Services shows the firm’s commitment to innovation to fill existing gaps in the market
As per 2013 Kenya Household Health Expenditure and Utilization survey by the Ministry of Health, out of 100 hospitalizations, about 35 of them are of retirees. In the same perspective, for every penny spent on hospitalization, Kshs. 35 is spent by retirees. This is as a result of retirees’ susceptibility to various chronic health risks such as hypertension, arthritis and many more that requires constant care and costly to manage.
Due to these inherent health challenges, the elderlies haven’t been getting much needed attention from the traditional mainstream insurance companies, as they are termed as high-risk individuals.
Consequently, this has often made them relying on out-of-pocket spending to fund for their healthcare need eventually summing up retirees’ plight of enjoy dignified life in retirement as they tend to erode their financial bedrock.
This also has a social-economic impact on the nation capacity to mobilize internal financial resources that can be channeled towards infrastructural development as retirees with no financial means are left to rely on their social networks to help them pay for their cost of seeking healthcare exacerbating the financial dependency crisis in the country.
In tandem with our vision of ensuring all Kenyans have a dignified retirement, these challenges have necessitated Enwealth Financial Services Ltd (Enwealth) a leading and innovative provider of social security financial services to fill the gap through pioneering innovation of Anaya post-Retirement health care fund, a product that enables retirees to access quality healthcare in retirement.
Further, the innovation is supported by the shift in the social security landscape most evidently changes in the legislative framework through amendment of Retirement Benefits Authority Act by providing guidelines to allow members of retirement savings schemes to pre-fund their healthcare insurance benefits that can be enjoyed at Retirement.
According to recently conducted research by Enwealth Financial Services Ltd in conjunction with Strathmore University dubbed Retirement Well-Being: A Kenyan Perspective, access to quality healthcare is of massive financial concern to many retirees due to it impact on their financial soundness as it constitutes majority of old-age expenditure. Further, its of outmost importance as its an enabler of their retirement well-being resulting to longevity.
This is further emphasized by government effort to integrate access to affordable and quality healthcare to all Kenyans in its core deliverables to the nation through universal healthcare initiative under the Big Four Agenda.
Therefore, Anaya seeks to address issues around the healthcare access by retirees through unlocking of the bottlenecks that haven’t allowing them to realize medical care before.
This is a first of its kind initiative made possible through a partnership between Enwealth, APA Insurance and Apollo Asset Managers that allow members to make goal-based savings while working into the pooled fund purposely for their healthcare needs.
The funds are then invested according to the investment guideline of retirement benefits. Upon retirement, member seizes from making further contributions and enrolled to a selected and funded for health insurance plan. The accumulated fund is then drawn annually to gather for members medical insurance premium for life subsequently, enabling savers to access affordable premium financed medical care through accumulated savings and investment income earned over time.
Being a long-term savings plan, Anaya members are able to enjoy tax incentives on their contributions and investment income as stipulated in the retirement benefit regulation framework. This plays a fundamental role in financial wellness of the savers as efficient tax management is among the key tenets of maximizing wealth creation and building of a secure financial future.
We also offer members flexible and tailor-made bouquet of benefits options ranging from inpatient cover of Kshs 5 Million to Kshs 500,000 that one can choose from and save depending on individual financial capability. Outpatient cover benefits are also imbedded within the inpatient benefits modules. As a result of our innovation for as little as Kshs 2,000 one is able to save for his/ her healthcare freedom in retirement.
We further allow agility that facilitate savers to transition from one plan to another as well as make contribution to the fund on various payment plans such as monthly, quarterly, semi-annually and annually as well one-off lumpsum deposit.
On death of the saver, the accumulated savings are availed to the nominated beneficiaries. The beneficiaries may opt to retain the savings in the pooled fund until retirement and realize the benefits promised to the contributor. In the event the contributor was already enjoying the medical benefits prior to death, the beneficiary can choose to continue enjoying the same or recall the money in demise kitty.
Similarly, retirees who may have missed the opportunity to pre-fund are also allow to enjoy care as premium-payers. Through the infrastructure, retirees together with their families are able to purchase medical insurance renewable annually based on the range of available cover options ultimately helping them to enjoy quality healthcare services from over 400 healthcare providers locally and abroad.
Saving culture in Kenya
The savings culture in Kenya is generally low. This is highlighted by recent report by the Capital Markets Authority (CMA). CMA survey alludes that countries Gross Savings Rate has dropped by almost a half in 10 years from 11.7 per cent in 2007 to 6.2 per cent in 2018. This is as a result of behavioral penchant for short-term as opposed to appreciation of long term saving vehicles.
Most remarkably, this has had a knock-on impact on the country to realize potential and benefits of long-term saving. This has been attributed to the inadequacy of necessary financial literacy that should be meant to inculcate saving culture in the country.
To bridge the gap, Enwealth is providing financial literacy to Kenyans in partnership with RBA and other stakeholders. Our financial literacy training focuses on change of mindset to encourage savings, investment and build skills and capacity in practical application areas such as entrepreneurship and agribusiness.
We believe this deliberate effort to enhance financial literacy reinforced by saving enabling infrastructural development and innovation such as Anaya and our other products i.e. Enwealth Personal Plan that allows both formal and informal sectors to save for their financial freedom in retirement seeks to provide a sustainable remedy that will facilitate a secure financial future for the country. The need for this infrastructural development is underlined by the fact that by 2030, it is projected over 10% of our population shall be above age 60.
As libertarian thinkers have it, in order to support the government initiative of providing social-economic services to the nation, it is fundamental for the citizens to take an active participatory role of saving with a foresighted objective of building a better and a secure financial future that ultimately leading to creation of the reliable social security financial services system in the country.