Old Mutual embeds life cover in unit trusts to halt emergency fund depletion

KAMPALA, Uganda — Old Mutual Uganda has launched a first-of-its-kind financial product in East Africa, embedding life and education insurance directly into its unit trust portfolios to protect investors from “predatory” withdrawals during emergencies.

The initiative, a collaboration between the group’s investment and life assurance arms, addresses a persistent challenge in the Ugandan capital markets: the premature liquidation of long-term savings to cover immediate crises such as funeral costs or school fees.

Zacchaeus Kisesi, managing director of Old Mutual Investment Group, said the move transforms the unit trust from a simple savings vehicle into a comprehensive financial safety net.

“We observed a consistent pattern among our clients,” Kisesi said. “Many were withdrawing funds prematurely to manage emergencies—needs for which solutions already existed within the wider Old Mutual family.”

The new “Integrated Financial Services” model provides three core tiers of protection at no additional cost to the client:

• Life Care: A bereavement benefit for the account holder’s family.
• Lifetime: Financial support in the event of permanent disability or critical illness.
• Safe Scholar: A dedicated benefit ensuring school fees and materials are covered for beneficiaries if the investor passes away.

The development comes as Ugandan regulators push for more sophisticated financial products to deepen local capital markets. Denis Kizito, director of market supervision at the Capital Markets Authority, noted that while unit trusts have become a gateway for retail investors, “financial shocks” often derail long-term wealth creation.

“From a regulatory standpoint, this kind of innovation aligns with our broader vision of building a resilient and inclusive financial markets ecosystem,” Kizito said.

The insurance benefits are performance-linked; eligibility is based on a three-month historical balance, with the level of cover increasing as the investment grows. Patrick Kimathi, managing director of Old Mutual Life Assurance Uganda, said the strategy aims to normalize life insurance, a product that is rarely sought out by consumers despite its necessity.

Industry observers say the move by Old Mutual, currently the dominant player in Uganda’s unit trust space, sets a new competitive benchmark for the region’s financial services sector.