Protect your Investment: Medical/ Health Insurance simplified

Imagine you have accumulated savings of Kshs 1 million in the bank to buy your house, that nice car or to start that business which will allow you to move from you dead-end job. Then you get a call and your parent or child is in hospital.

They just had an accident or have suddenly gotten sick. The hospital needs a deposit before admission to the hospital, then the bill increases quickly because there are procedures and surgeries required. What will you do? You have to withdraw your money from the bank and pay for the medical bills and poof! goes your progress to meeting your goal and becoming wealthy.

Insurance can sort out this problem. To protect your investment or saving you can pay an insurance company a premium to cover you in case an unfortunate event happens like medical expenses. For example, you can pay premiums of Kshs. 50,000 per year to cover you for hospital bills up to 5 million.

Understanding How Medical Insurance Works

What the insurance company does is have a pool of premiums from many people and use that pool to pay the bills when some of the people in the pool need it.

If they have 1000 people paying 50,000 they have 5,000,000 to pay your hospital bill, which insurance terms is a claim. If none of the people who paid the premiums don’t end up in the hospital, then the insurance company keeps the premiums that year.

Premium Calculation: The insurance company comes up with suitable premiums for every product and person to ensure they are not too exposed to pay claims and meet the promise to clients to pay the bills.

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Policy: To ensure the client is not too risky, the insurance company comes up with policies. They will vet and analyze your risk. In medical they will check if you already have medical conditions. These are preexisting conditions) they will check if you are more likely to claim and charge premiums according to the probability of your risk.

Exclusions: As they come up with a medical product the insurance company will come up with situations that they will not pay for. These are mainly situations when a person puts themselves in a position to claim, like intentional harming themselves.

Waiting Periods: so why can’t I wait until being diagnosed with a condition to take the medical insurance. Well, this will not work well for insurance companies so they have waiting periods to ensure you take the insurance before you get sick and need it. That way they reduce the probability of all the people who claim their insurance and have money left over for those who need it.

policy documents: Who wants to read the three pages of small print in the smallest font? Most of us don’t even read the terms and conditions, we just scroll down to sign the dotted lin

ents. Once you sign you have agreed to the conditions set and can’t change them later when you need to use the insurance.

Medical Insurance expectations Vs Reality

When I buy medical insurance I expect that when I get sick or in an accident, the insurance company will pay all the bills. This is your expectation but is it the reality? Yes, however only if you understand the how the insurance works.

Sometimes you may have medical insurance but it doesn’t cover your medical bills. What? But they promised to pay! That would probably be your reaction. Right? The reason this happens is that you didn’t have enough information on your medical insurance benefits and exclusions, and you didn’t do your due diligence to ensure that what you needed the medical insurance for is catered for in what you paid for.

However if there are dispute on the payment of claims the client is advised to report it to the Insurance regulatory authority IRA.


There are many misconceptions about medical/health insurance. However, you will notice that Insurance is not complicated if you understand what you want and what you are buying. For people not in the insurance industry will benefit by choosing the right insurance advisor.

You must gain control over your money or the lack of it will forever control you. –Dave Ramsey