Ugandans are widely recognised for their entrepreneurial drive, yet many struggle to preserve and pass wealth to future generations.
Family businesses, which form the backbone of the economy, often collapse after the first generation.
Experts argue that insurance could play a pivotal role in reversing this trend.
Traditionally, insurance has been viewed primarily as a safety net. However, with the right products and financial planning, it can also serve as a vehicle for wealth creation.
“An insurance company or agent can structure financial plans that enable individuals and families to build personal and generational wealth,” says Dorcus Kuhimbisa, chief operations officer at Jubilee Life Insurance.
“Whole life and universal life insurance policies, commonly used in developed countries, allow policyholders to accumulate cash value over time. This value can be accessed during their lifetime or left as an inheritance.”
Kuhimbisa noted that a major challenge in Uganda is the mis-selling of insurance products.
Some agents prioritise commissions over clients’ long-term financial goals, selling products that do not support wealth accumulation.
“Many clients come to us with policies that do not align with their aspirations. We reject such cases and focus on educating customers about their options,” she said.
Ms Kuhimbisa urged Ugandans to carefully review policy terms and seek professional advice before committing to any insurance product.
In countries like the United States and the UK, the wealthiest families commonly use insurance policies as part of estate planning, ensuring smooth wealth transfer without legal disputes.
Challenges in Uganda
Despite insurance’s potential, cultural and economic factors make generational wealth creation difficult in Uganda. Many family businesses operate informally, limiting access to capital and long-term financial planning tools.
“The extended family system in Uganda often blurs the line between business and personal finances. Family heads feel obliged to employ relatives even when they lack skills, leading to inefficiencies and eventual collapse,” explains Henry Ngobi, director of finance and administration at the Youth Initiatives for Youth Action (YIYA) Foundation.
He adds that many rely on informal financial networks instead of structured products such as insurance or investment plans.
Uganda’s regulatory environment can also present barriers to wealth preservation.
Women face additional hurdles, as inheritance laws and cultural traditions often favour male heirs. Kuhimbisa highlights that insurance can overcome this.
Personal pension plans and endowment policies allow policyholders to name beneficiaries, ensuring wealth transfer regardless of gender.
By embracing insurance as a wealth-building strategy and addressing cultural and economic challenges, Ugandans can secure financial legacies that endure for generations.
