Four Egyptian banks started issuing life insurance certificates called Aman (“security” in Arabic) on Sunday with the aim of providing a safety net for temporary labourers.
The certificates, designed on the directive of President Abdel-Fattah Al-Sisi to provide decent incomes for the families of marginalised groups, are available at the National Bank of Egypt, Banque Misr, the Banque du Caire and the Agricultural Bank of Egypt.
One certificate is worth LE500, and up to five can be bought on the presentation of ID to any of the four banks. The three-year life insurance certificates can be renewed twice.
The scheme covers individuals between the age of 18 and 59 who do not fall under the current social security umbrella, including temporary workers, labourers with unfixed incomes, and working single mothers, and it aims to provide stability for their families in the case of the death of the policy-holder, whether the cause of death is accidental or natural.
Beneficiaries can choose between cashing in the entire amount of the life insurance and receiving a monthly pension.
In the former case, and in which the policy-holder died of a natural cause, the beneficiaries receive between LE10,000 and LE50,000, depending on the number of certificates the policy-holder had bought.
In cases of accidental death, the beneficiaries receive between LE50,000 and LE250,000, depending on the number of certificates the insured person had bought.
According to a bulletin released by the National Bank of Egypt, a death by accident is a death caused by physical injury that results from sudden, severe, external incident and solely leads to death.
The scheme also provides monthly pensions for four to 10 years. In cases of natural death, beneficiaries receive between LE200 and LE1,000 per month if the instalments are paid over five years and between LE120 and LE600 if paid over 10 years.
Hazem Hegazi, vice president of the Banque du Caire, explained that the three-year certificates can be renewed twice, which means they can be valid for a maximum of nine years.
The certificate is worth LE600 after three-year interest and the deduction of LE4 per month insurance, he added.
If the policy-holder is employed after buying the certificates, they remain valid with their banking and insurance merits, Hegazi said.
They become invalid if the policy-holder chooses to redeem their cash value or if they reach the age of 60. They are also not designed to provide financial compensation in cases of injury or for purposes of medical insurance.
The scheme does not provide pay-outs if the death of the policy-holder is caused, directly or indirectly, by suicide within the first two years of the validity of the certificates, military operations, or incidents that are a direct or indirect result of a local or foreign war.
Deaths during civil disturbances, if the policy-holder is serving in the military or out of service, owing to capital punishment, or in riots and terrorist operations if the policy-holder positively participated in such events are also not covered.
The four banks that issue the certificates have specified that deaths by accident are treated as natural deaths if they happen within the first six months of the certificates being issued.
Since the certificates were released on Sunday, demand has been slow because, said Hegazi, of the lack of publicity on television and in the newspapers.
He said that Al-Sisi has asked companies affiliated to the Armed Forces to insure their labourers, and he anticipated that other companies would also buy Aman certificates for their workers.
In Alamein last week to inaugurate various projects, Al-Sisi directed the Armed Forces to coordinate with companies working on national projects to buy Aman certificates, to a total value of LE5 billion, for two million labourers within the next two weeks.
The companies would then be paid back in instalments.
According to a statement by Hisham Okasha, president of the National Bank of Egypt, Aman certificates have been given to temporary workers with companies that the bank deals with.
These include labourers in the cleaning, security, maintenance and storage sectors who do not have social security coverage.
The intention was to “provide insurance for these workers and their families, giving them decent living conditions and incomes,” the National Bank of Egypt, which employs 2,800 such workers, said.
It had issued certificates for each individual worth LE2,500, the bank statement said. The bank will bear a share of the cost of the certificates and the rest will be paid over 10 months by the workers.
Prime Minister Sherif Ismail attended the signing of the contract for the new scheme between the Misr Life Insurance Company and the four banks last week.
*This story was first published in Al-Ahram Weekly