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Explained: What Happens to Money Left in Sacco When a Member Dies

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In the event of a Sacco member’s demise, concerns frequently emerge regarding the status of their account deposits, outstanding loans, and various financial issues.

This transition can be overwhelming for the bereaved family as they deal with the policies related to inherited assets, existing liabilities, and, crucially, the funds intended to provide for their dependents.

It was highlighted that the Kenya Police Sacco has initiated a benevolence program to mitigate the risks associated with a member’s death.

Each member contributes Ksh 350 monthly, which is allocated to this fund.

“This programme ensures that if a member with an outstanding loan passes away, the SACCO clears the loan, backed by an insurance program to provide full support. No debt is passed on to the family member,” he said.

Angutsa stated that the program not only addresses loan coverage but also offers a funeral benefit for the primary member, their spouse, and dependent children.

“If the principal member passes, the SACCO offers KSh 70,000 to help with funeral expenses. For a spouse, it’s KSh 40,000, and for a dependent child, it’s KSh 30,000. These amounts are subject to review upwards,” he stated.

In the event of a member’s passing, the Sacco will match the member’s savings and provide the family with an amount equivalent to double the member’s savings.

“For every shilling saved by the member, the SACCO matches it upon the member’s death. For instance, if a member has saved KSh 1 million, the family receives KSh 2 million. This effectively offers life insurance benefits without needing a separate policy” he said.

The Chief Executive Officer clarified that the family has the option to inherit the membership and receive dividends.

In instances where a member passes away without any next of kin, the SACCO adheres to administrative procedures, which may involve court appointments, to guarantee that the funds are distributed to the appropriate beneficiaries.

Angutsa noted that after the court proceedings related to the death are finalized, the family must provide the necessary documentation, including the death certificate, in order to file a claim.

The duration of this process is primarily influenced by the time taken by the family to prepare and submit the required documents to the SACCO.

“How long that takes largely depends on the family’s side, as they need to process the documents and submit them to us. Occasionally, family disputes may arise—like disagreements over the rightful beneficiary.

“In such cases, it can be challenging for us to proceed until the issues are resolved, but these are usually family matters that we try to support in resolving,” he explained.