• On the death of a member, the Sacco matches the member’s savings by doubling the amount given to the family, which acts as a life insurance benefit without a separate policy.
• Families of deceased members have the option of inheriting the Sacco membership, allowing them to continue to receive dividends from the member’s contributions
• In cases where a member dies without next of kin, the Sacco undertakes administrative and legal processes to ensure that the funds reach the rightful beneficiaries.

Elijah Ntongai, a journalist at TUKO.co.ke, has over three years of expertise in financial, business and technology research and reporting, providing insight into Kenyan and global trends.

Savings and Credit Cooperative Organizations (Sacco) play a unique role in the lives of millions of Kenyans, providing collective savings and loan opportunities that often make a difference in times of need.

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When a member of a Sacco dies, questions often arise about the future of account deposits, loans and other financial matters.

The transition can be daunting for family members as they navigate policies related to inherited assets, pending liabilities, and most importantly, funds that were intended to support their loved ones.

In an interview with TUKO.co.ke, Kenya Police Sacco CEO Solomon Angutsa explained how the Sacco helps the families of members when they pass away.

Goodwill program

He noted that Kenya The Police Sacco has started a goodwill program to address the risk that occurs when a member dies. Each Sacco member contributes KSh 350 every month which goes into the fund.

“This program ensures that if a member with an outstanding loan dies, the SACCO releases the loan, backed by an insurance program to provide full support. No debt is passed on to the family member,” Angutsa told TUKO.co .ke.

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Angutsa said that in addition to covering loans, the program provides a funeral benefit for the main member, spouse and dependent children.

“If the main member passes, the SACCO provides KSh 70,000 to help with funeral expenses. For a spouse, it is KSh 40,000 and for a dependent child, it is KSh 30,000. These amounts are subject to upward revision,” he said.

Life insurance benefits

On the death of a member, the Sacco matches their savings and provides the family with double the member’s savings.

“For every shilling saved by the member, the SACCO matches it on the death of the member. For example, if one member saved KSh 1 million, the family gets KSh 2 million. This effectively provides life insurance benefits without the need for a separate policy” Angutsa told TUKO.co.ke.

What happens to membership

The CEO explained that the family can choose to inherit the membership and receive dividends. However, in cases where a member dies without next of kin, the SACCO follows administrative processes, including court appointments if necessary, to ensure that the funds reach the rightful beneficiaries.

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Angutsa stated that, once the court process surrounding the death is over, the family presents the necessary documents, such as the death certificate, to make a claim.

The length of the process largely depends on how long it takes the family to process and submit the documents to the Sacco.

“How long it takes depends a lot on the family side, because they have to process the documents and send them to us. Occasionally, family disputes may arise, such as disagreements over legal ownership. In such cases, it can be challenging for us to continue until the issues are resolved, but these are usually family matters that we try to support them in resolving,” Agutsa explained.

How banks deal with the death of customers

Earlier, TUKO.co.ke reported that banks and other financial institutions have developed a number of safety nets to prevent or reduce the threat posed by non-performing loan (NPL) portfolios and Tier 1 lenders. Stanbic The bank is no different.

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In an interview with Stanbic BankingTUKO.co.ke found that if someone moves on without completing the loan paymentsthe loan is covered by life insurance, which is included with all Stanbic loans.

This protects both the borrower and their family in such unfortunate events. If one is laid off, please approach the bank to work out a manageable repayment plan.

Source: TUKO.co.ke