Benevolent Fund: Saccos Benevolent Fund Explained
Have you heard of the benevolent fund provided by Saccos? Before we get into what it is and how it benefits you, let’s run a scenario.
What would happen if you were to suddenly pass away? Or lose a close family member, say, spouse, or child? Would you or your family start organising for a Harambee to cater to the funeral costs? This is what many of us are used to; getting contributions from friends, family and other well-wishers to meet funeral costs.
I am not saying this is a bad practice. In fact, community support is what gets many of our lives going; support for school fees, hospital bills, and even funerals. But that doesn’t mean we can’t take measures to cushion ourselves or our families against expenses, like funeral expenses when the time comes; because it will come. Death is inevitable.
Fortunately, there are several financial products you can use to cushion your family financially during such devastating times. A good example is a life insurance policy, which pays your beneficiary a lump sum upon your demise. Depending on your policy, these funds can be quite significant in helping your family pay off debt, invest, and pay for your kid’s education, among other expenses. Another example is a funeral or last expense policy. With this, the insurance company caters to your last expenses. Last but not least, there is the benevolent fund offered by many Saccos. This is what we will be talking about in this article.
The first time I really understood the benefits of Sacco’s benevolent fund was a little over a decade ago. My maternal grandfather had just passed on and my grandma was receiving some funds, thanks to his membership and savings in that Sacco.
Ready to join a Sacco? There are numerous things to consider. I have covered that in this post. Among the top products offered to consider and pay attention to is the benevolent fund. In this article, I will take you through the basics of a benevolent fund; from what it is to what it offers you and possible payouts and monthly contribution ranges.
What Is a Benevolent Fund in Sacco?
A benevolent fund, also referred to as a Welfare Fund or Burial Benevolent Fund in a Sacco acts as a welfare kitty to support members or their beneficiaries upon the death of the member or their beneficiaries. The most commonly covered beneficiaries are the spouse and children. However, some Saccos will extend this coverage to one’s own parents and parents-in-law.
So, how does this work? Here’s an example.
Let’s assume you are a member of a certain Sacco and contribute to the benevolent fund. You also have a family, a spouse and children. If you are a member of a Sacco, your beneficiaries, spouse and children, will receive a lump sum from your Sacco to cover your burial expenses. Another scenario is if either of your beneficiaries passed on, your registered spouse or children, you’d receive a lump sum payment from your Sacco to cover their burial expenses.
How Much Should I Contribute Toward My Benevolent Fund?
If I told you contributions towards a benevolent fund are fairly affordable would you believe me?
While Saccos have varying amounts, the contributions can be as low as KShs. 100 per month or lower and as high as KShs. 350 or more for higher payouts. That adds up to a minimal annual premium of about Kshs. 1,200.
Considering the payouts, the number of beneficiaries you can have and the financial burden it can alleviate during a very stressful moment, the monthly contributions are quite affordable and worth it.
How Much Will My Benevolent Fund Pay?
One thing I have realised from my research is that beneficiaries can get quite a lump sum. It might not be millions of money. Or even hundreds of thousands. But it can be a significant sum to help you or your family meet funeral expenses, which can be overwhelming in some instances.
The most common range I have seen is from KShs. 50,000 to KShs. 70,000 for the primary member. However, some Saccos will pay as much as KShs. 100,000 for the primary member. As for dependents, it can range from as low as KShs. 15,000 to KShs. 70,000 depending on whether it is a spouse, child or parent.
How much you or your family will receive from Sacco’s benevolent fund will depend on the Sacco’s policies. As you shop for a Sacco to join, ensure that you consider what products they offer, including a benevolent fund. Consider the payouts for you as the primary member and for your beneficiaries. Don’t forget to compare the payouts among different Saccos. Finally, consider the monthly or annual contributions you must make. Is the figure friendly to your pocket? As much as you might want to join a Sacco whose benevolent payouts are higher, you must ensure the monthly contributions are affordable.
What Do I Need to Claim From My Benevolent Fund?
The unexpected has happened! Perhaps you have lost a spouse or child and need to claim your benefits for the benevolent fund. Maybe it’s a parent or parent-in-law and your Sacco happens to cover them, too, or, perhaps, your family has had the misfortune of losing you, the primary member and needs to make a claim. Where do you start? Where do they start?
For starters, you must ensure all the details are up to date. And not just for the benevolent fund. Always ensure your personal and beneficiary details are up to date with any financial institution you deal with.
When it comes to claiming from your Sacco, you will be required to provide some documents. While it will vary depending on the Saccos policies, most Saccos require you or your beneficiaries to produce:
- The death certificate
- ID copy or birth certificate
- Burial permit from the Area Chief
- Marriage certificate if claiming for the spouse
- Birth certificate of child if claiming for the child
- Or other supporting documents
How Long Does it Take to Process One’s Benevolent Fund?
From experience, although this was a while back as I mentioned before, it didn’t take long. We buried my grandpa within a week and by then, my grandma had received the welfare funds to help with burial expenses.
How long it will take to receive benefits from the benevolent fund with vary between Sacco. With most Saccos, the claim can be processed within 48 to 72 hours. Ensure that you confirm with your Saccos policy about the processing timelines. And, to ensure smooth and faster processing, ensure that your details are up to date.
Final Word
If you are planning to alleviate the financial strain that comes with funerals, contributing to a benevolent fund is one of the best ways to do it. These welfare funds offered by Saccos are quite affordable, with monthly contributions as low as KShs. 120. The payouts aren’t as disappointing either.
Before settling for any Sacco, ensure you shop around and compare services and products offered, including a benevolent fund. Are you a member of any Sacco? Do you contribute toward your benevolent fund? How are the monthly contributions and payouts?
DISCLOSURE: THE INFORMATION PROVIDED TO MY READERS IS GENUINE AND PRECISE TO THE BEST OF MY KNOWLEDGE. THE LINKS PROVIDED IN THIS ARTICLE DO NOT BELONG TO ANY AFFILIATE PARTNERS AND I AM NOT PAID FOR THEM. THE ARTICLE OFFERS GENERAL INFORMATION AND SHOULD NOT BE USED AS A SUBSTITUTE FOR PROFESSIONAL ADVICE OR HELP THAT CATERS TO YOUR INDIVIDUAL FINANCIAL GOALS. KINDLY SEEK HELP AND ADVICE FROM YOUR FINANCIAL ADVISOR FOR PERSONALISED ADVICE AND HELP. ANY ACTION TAKEN BASED ON THIS INFORMATION IS AT YOUR OWN RESPONSIBILITY AND RISK.
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