Life insurance in Nigeria – The possibility of death is a forbidden thought in this part of the world, it’s often seen as ordained evil, never wanted accompanied with a God forbid gesture.
But in actual sense does that avert death occurrences in any way? While an average Nigerian will rather recite God forbid a thousand times per seconds, death sweeps off who it may at convenience.
Given this, several persons die unprepared, leave nothing for the family they so cherished to survive on despite their efforts to leave a lasting wealth.
What am I trying to say? An average man plays down on the importance of Life insurance in Nigeria and beyond.
If by any means you have been making money without adequate life insurance on yourself in place you are most miserable permit me to say.
I have written this guide to put you on the right path which revolves around a good life insurance policy that outlives your struggle afterward.
What is life insurance by the way?
Life insurance is an agreement/contract that subsists between an insured otherwise known as the policy holder and an insurance provider/company otherwise known as the insurer upon which the insurance company will pay a destined amount to a beneficiary pointed or identified by the insured, this payment is usually made at the death of the policy-holder.
This money being paid to the beneficiary is a sum in exchange for premium agreed and contributed by the insured in utmost good faith, which also it’s been certified that the insured lives up to his/her contract responsibility.
Illustration 1
Let’s assume Mr. Benson Mark bought a life insurance policy with a certain company (name assumed) John Rob insurance company.
In the contract signed and delivered, it was agreed that Mr. Benson Mark will have to remit a monthly premium of say N50k to keep this policy active in his lifetime.
Mr. Benson kept to the contract and was remitting his premium as stated in the provision of the contract.
Eventually, he dies after sometimes for possible illness, etc.
It’s now the responsibility of John Rob insurance company to pay Mr. Benson’s acclaimed beneficiary a lump sum of money which usually run in millions as a benefit for the policy held with the company by Mr. Benson.
You now see how the deceased beneficiary which mostly should be a member of the immediate family will have something to fall back on and build life afresh in the absence of the breadwinner.
In the case of a married man, the beneficiary is usually the wife except the man states otherwise in his contractual agreement. Where she’s legally married to the man, it’s an express service.
Possible uses and benefits of a life insurance policy in Nigeria
- In view of costs and expenses associated with burial, a life insurance policy can take the load off your loved ones.
- Settlement of debts, if you eventually die without settling certain debts these can be taken care of from your life insurance package.
- Life insurance benefit can replace your income while your loved ones manage to get back to a regular income.
- You may wish to buy a life insurance to serve as an inheritance to your loved ones on your demise. In this case there should be an heir apparent to inherit your benefit so that it’s been transferred expressly without wasting any time.
All round you can see that your family will benefit in a number of ways from a life insurance in Nigeria on your demise.
Types of life insurance policies in Nigeria
Insurance policies differ in feature and purpose, depending on what the holder of the policy intends to achieve afterwards.
The below policies are obtainable in Nigeria
1. Term life policy – If you wish to buy a policy that lasts for certain number of years as agreed in the contract term, you may have to consider a “Term life insurance policy.”
You have the right to choose the duration of your policy in this capacity. This type of policy makes provision for the insurance company to pay only at the death of the insured which usually spans to a period of 10, 15, or 20 years, or even more as the case may be.
2. Level Term policy – If you are conservative and wish to stick to a particular budget for your insurance premium all through the duration of contract, you may have to consider the “Level term” insurance since it allows the insured to decide the flexibility of suitable premium.
3. Single premium policy – If you have enough money to dump or are afraid you will misuse such money, why not consider buying “Single premium life insurance policy.”?
The idea with a single premium is that you only pay a single premium for all the duration of this contract.
Assuming you buy a policy with a span of 10 years on a monthly premium of N10k.
If you have N1,200,000 you may decide to pay up the entire premium at once.
Read also: Beginner’s guide to car insurance policy in Nigeria
4. Burial expenses – Like it sounds, this has immediate benefit on burial expenses
5. Group life insurance – This may be referred to as a workplace insurance in the sense that the employer gets his/her employees enrolled on it, it’s usually a low premium package.
Others are
- Whole life insurance and
- Keyman insurance policy, a policy a business buy on behalf of a crucial figure on its payroll usually the CEO or general Head of such company.
Life insurance companies in Nigeria
Most insurance companies in Nigeria provide life policy, the below companies have been carefully handpicked as approved the National Insurance Commission.
- Allied Alliance Insurance Company
- ARM Life PLC
- Capital Express Assurance
- Custodian Life Assurance LTD
- FBN insurance LTD
- Mutual Benefits Life Assurance LTD
- Old Mutual Nigeria Life Assurance Company LTD
- Royal Exchange Prudential Life Assurance PLC
- Spring Life Assurance PLC
- Standard Alliance Life Assurance
- Unic Insurance
- Tangerine Life Insurance
- Coronation Insurance
- Zenith Life Assurance Company
- Heirs Life Assurance
- STANBIC IBTC Insurance
- Enterprise Life Assurance Company Nigeria, etc.
These are few of the life insurance companies in Nigeria.
What is group life insurance rate in Nigeria?
You will first and fore most consider the age of members in this policy.
In line with the industry standard as guarded by the “National Insurance Commission” the average rate of a group life insurance is somewhere around 6 percent, could extend to 10, but industry benchmark is measured at 6%.
How to calculate group life insurance in Nigeria
Your group life insurance premium is calculated and denoted by;
P=SA (TAE *3) x Rate/100
Where P= Premium,
SA= Sum assured,
TAE= Total Annual Emolument.
Conclusion
Life insurance in Nigeria is a good policy to buy into since it can help your loved ones to survive and replace your job to make for the void your demise might cause them.
You may have to select a suitable and flexible package that meets your income capacity, for every income class, there’s a package you can buy into.
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