How to Get Life Insurance in Nigeria (Updated 2021)

Have you been thinking of a way to know or get life insurance in Nigeria but don’t know how to start, or what to prepare before you can be a life insured in the country? Today, I will be talking about this, which includes different insurance plans and pricing in Nigeria, requirements, and how to start your application.

You may be asking;

Is Life Insurance in Nigeria Beneficial for Me?

Yes, Life insurance is very advisable for everybody, irrespective of your country, either Nigeria or USA. Because our lives are our most valuable asset, with it we can acquire all kinds of wealth, any good lifestyle and development at different levels.

But what happens when it’s cut short, how do you cater for this uncertainty? This is why you need to get your life insured!

Why You Need A Life Insurance in Nigeria

So why on earth do I need a plan that I don’t get to see the dividends while alive? It’s a good question which most people have asked over the years.

So these are the reasons you need a life insurance policy;

1. Tax-Free Investment

We make investments to see accumulated profit over a long period of time. Sometimes, these investments don’t yield as much profit as we would expect due to certain factors.

One such factor is Tax which is constantly deducted from whatever amount we have. Having a Life Insurance Plan keeps tax away from your investment and is a way to invest in the future.

Seeing that it is Tax-Deferred, you shouldn’t expect mind-blowing discounts. Overall, it’s a good form of investment plan you should look into.

2. Less Post-Death Worries

In Nigerian society, burial ceremonies are some of the biggest events you could witness. It’s an unwritten rule to give “a befitting burial”, so a lot of money is put into it. Not having the funds to conduct the “befitting burial” causes a lot of worry for most.

A good way to get past this situation is by using the money paid to your beneficiaries. This fund, and the accompanying death benefits, will soothe the worries. 

It is not a guarantee that the money gotten will cater for the event, but it’s a good way to support a burial financially.

3. Flexibility

Another reason why you should consider this above any form of investment is its flexible nature. This makes it easier for varying personalities, with different income sizes to have a plan in place in an event of death.

The terms are flexible enough to accommodate each and everyone, not just a particular group. You wouldn’t have to go above your means in order to get a good policy as the respective plans can be adjusted to fit in people of different personalities.

4. Simplicity of Terms

Most agreements similar to this tend to be very verbose, make it difficult for some certain individuals to clearly grasp the contents. This is a sad reality.

Today, most life insurance policies are quite straightforward and easy to understand, employing the use of common, yet professional words and grammar. With this, you know what you’re getting into and how to work your way around it.

Note;

This may sound like something you’ll personally enjoy, but it’s not. It is for your family members (like wife, husband, children, or anybody who’s your Next of Kin).

If you need insurance to cover you personally, consider getting a Health Insurance as well. Oh, I know you’re thinking right now that;

What’s the difference between Life Insurance and Health Insurance?

Note that Life Insurance is different from Health Insurance. And the basic difference is that;

Basically, Life insurance caters to the dead, you don’t get to enjoy the benefits while alive. It’s a form of insurance whereby a certain amount of money is paid to the deceased in an event of his/her death.

While Health Insurance can cater to you while you’re still alive! Check this post to learn more about Health Insurance in Nigeria.

How Life Insurance Works

A premium is paid by the insured to the insurer upon registration, either in one whole payment or periodically as agreed in the terms.

When the insured is dead by natural cause, the benefits are given to the deceased family. Deaths caused by events such as war, riot, fraud, or suicide may not apply to life insurance. Furthermore, in an event of a terminal disease, the funds may be released to the insured before death.

There exist some types of life insurance which offer various benefits with varying requirements. We’ll look into those as we go along, but for now, let’s see how we could get a life insurance plan in Nigeria.

How to Get Life Insurance Plan in Nigeria

Almost all nations have an option of life insurance for its citizens, and so is Nigeria. We’re blessed with diverse insurance firms that offer various kinds of insurance, and you have a wide range of options to pick from.

Deciding to get life insurance in Nigeria could be one of the best decisions made. This eases the worry of your immediate family if you happen to pass away (not untimely by the grace of God). There’s less fuss because a good part of the burial rites would have been taken care of.

So, we start with;

1. Ensure you meet the requirements

Before going ahead to settle for any life insurance plan, some boxes need to be checked to make it a worthwhile process. You may call these requirements or prerequisites, but they all affect the approval of your request or not.

  •  Financial Background

First on our list has to do with money, but this doesn’t make it the most important in the list. However, having a good financial record will improve your chances of getting a life insurance plan in Nigeria, as opposed to people with piles of unpaid debts.

This doesn’t mean you have to be a millionaire, or working in one of the most prestigious organizations in the country, but having a good financial background entails payment of all necessary bills, taxes, and fees. 

This speaks well of your financial discipline and may affect your application in a positive way.

  • Health Information

You’d be accessed on your health condition before getting to land a good life plan. Certain factors like height, weight, blood group, susceptibility to terminal diseases, blood pressure, and more.

Now you should know that you don’t get to be treated if you have a poor health background, rather it affects what you should pay for premiums or get as death benefits. Living with certain health conditions might make it difficult to get a life plan.

The excessive use of alcohol and tobacco have been top of the reasons why most people don’t get accepted. If you already engage in the excessive use of these products, my advice is to reduce their intake or put a stop to it.

  • Current Age

Another important box that needs to be checked is the age factor. There’s no fixed age or age group here, but the use of life expectancy. This plays a huge role in determining your acceptance.

Living with a certain ailment with a certain age may not be accepted, or you may be required to pay higher premiums.

Seeing that Nigeria’s life expectancy ranges between 52 – 55 years we can establish that living above 60 could attract a much higher premium, or possibly declined if you have a threatening health condition.

  • Occupation

Certain occupation makes it impossible to secure life insurance in Nigeria. Occupation, where you are constantly exposed to hazards which may lead to death, don’t often get considered.

Working in an arm of the military may prove difficult in getting a life insurance plan due to the risks involved. You’re are already exposed to life-threatening events on a regular basis. Insurance tries to take care of various kinds of “risks”, but constant exposure to these “risks” will be an exercise in futility on the part of these firms.

  • Sincerity

I know this might sound strange to some people, like how does my being sincere determine if I qualify for a life insurance plan. 

Since this has to do with your health, everything is done under good scrutiny. When asked to fill out certain information on a form, be as truthful as you can, lying to cheat the system wouldn’t be condoned. 

Whatever health problems you have, don’t be scared to indicate, you might end up paying a higher premium than getting rejected outrightly.

After meeting the requirements, then you need to;

2. Choose the Type of Life Insurance

There are some types of life insurance and this should be your starting point – knowing the type to choose.

These life insurance plans come with their respective benefits and disadvantages, pros, and cons. Getting to know which one suits your current lifestyle and future plans is quite okay.

A lot of factors should be taken into account before choosing; things like your current age, life expectancy, signs of life-threatening illnesses, current economic status, and quite some more. 

Remember, you don’t get to see the proceeds of your investment immediately; sometimes it could take ten years, twenty years or more before the insured gets to benefit from this form of insurance.

Types of Life Insurance in Nigeria

We have two basic types of plans of life insurance in Nigeria, which are; 

  • Term Life Insurance Plan

This is the most popular of the two types of plans of life insurance in Nigeria, and the most bought plan. It is by definition; 

Term Life Insurance Plan is a plan valid for an agreed period of time upon which money is paid to the beneficiaries of the deceased. It’s usually between a period of 1 – 30 years, which could be renewed upon expiration.

With Term plan, you’re are obligated to pay a fixed amount as premium at upon agreement of contract. This translates to a fixed amount of money paid to the beneficiaries in any event of your death. 

So basically, when you buy a “Term Life Plan”, there is no interest, it’s fixed.

The benefit of Term Life Insurance Plan

One of the good reasons to go for this plan is its affordability. You have a certain amount to pay, no other additional fees or charges as you go. Also, it’s less complicated since you and the beneficiaries already know what you’re getting as proceeds.

The second type of life insurance plan is;

  • Whole Life Plan (Permanent Life Insurance Plan)

This is an iteration of a Permanent Life Insurance Plan. It provides cover to the insured for the duration of their lifetime. It comes to an end upon the death of the insured.

You get to spread to payment of premiums and the amount to pay at each interval. It’s a really flexible option, unlike the Term plan which is fixed. Asides the money got upon the death of the insured, the beneficiaries also get death benefits.

The benefit of Whole Life Insurance Plan

A major reason why you should go for this option is the no charges in form of tax i.e Tax-Deferred. It’s a really good option to go for but could be very expensive even when compared with the Term plan.

Now, after you’ve picked your choice among the two types of life insurance plan in Nigeria, then you will need to;

2. Pick a Life Insurer

Picking a Life Insurer in Nigeria could be much of a task due to the highly competitive market, but not to worry we’ll get you through it.

What you’ll find out if you embark on this journey is that these firms all provide similar services with slight differences here and there. Pricing plans seem to be quite the same across the board, but certainly, some get to outperform the rest – these are the best.

We have some of the prominent names; the likes of AIICO, ARM, Allianz NG, and FBN are some of the good choices among the bunch.

3. Physical Examination

Once you choose an Insurer and get to fill out certain forms, you may be required to undergo a physical examination.

This basically has to do with your health life, as certain areas will be checked before evaluating your premium. It’ll be more like an all-around medical check-up to ascertain the level of risks before finalizing the deal. If favorable, it’s analyzed and it’s left for you to pay.

4. Paying your Premium

Upon choosing a life Insurer you’d get to get some paperwork sorted out, signing various documents, writing certain letters if needed, and many others. 

Those documents will be of no use without your premium. It’ll be agreed on these documents how the payment plan will take place. It could be one whole payment where you get to pay a huge amount and wait for years before getting to see the gains. 

It could also be divided into smaller amounts which you’ll be required to pay consistently, over a stipulated time frame.

This is why it’s important to make a good decision in number 2 above, you don’t want an Insurer who’s going to leave a big hole in your pocket.

You may also want to know;

The Price of Life Insurance Plan in Nigeria

Unfortunately, we don’t know the price of life insurance plans in Nigeria, because these insurance firms choose not to disclose the prices of their life insurance plans to the general public. I think they have a good reason for doing this.

What you can do, however, is to visit any of these insurance firms in the country. Through their website, you’d be able to get a quote based on your personal needs and size. 

It isn’t a one style fits all system where everything just works. 

Taking a term plan which could last for up to 30 years as an example; you may decide to make your 12 years and I choose 15 years, We’ll both pay different amounts as premium. It could get higher or lower depending on the number of people included in such a plan.

CONCLUSION – Getting a Life Insurance in Nigeria

I’ll wrap this up by saying; we could make an easier future for our kids as we transcend this world. If you’ve not thought of it, why don’t you try it out, you’ll be glad you did.

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