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Uncertainty drives Nigerians to embrace life insurance policy

Posted by By Sunday Ojeme on 2006/07/19 | Views: 458 |

Uncertainty drives Nigerians to embrace life insurance policy


On February 13, 2006, policemen at the Ojuelegba division Lagos, were stunned when Capital Express General Insurance Limited paid......

On February 13, 2006, policemen at the Ojuelegba division Lagos, were stunned when Capital Express General Insurance Limited paid out N204, 375 to the wife of their late colleague, Justina, whose husband, Inspector Patrick Ughealunechi, died from gunshots received during the clash between the police and soldiers in the popular area.

The police officer was one of the victims of the October 4, 2005 clash between some men of the Nigeria Police Force and soldiers from the Albati Barracks. He was the Armourer at the Area C police station at the time of the fracas.

While alive, he had taken a life policy from the insurance company on May 3, 2004 with a monthly premium of N2, 000 that covered him for the amount stated. He had only paid the premium for a period of 14 months, which amounted to N28, 000 before the fracas that eventually took his life.

At the police station where the wife came for the cheque, she told the gathering that her husband never told her about the policy but that she always noticed some receipts bearing the name and logo of the insurance company. She said she was, therefore, surprised when delegates from Capital Express traced her to her home and told her about the money she was to receive in respect of the policy that her husband purchased from the company.

She expressed gratitude to the company for being faithful and recounted that although it was painful to lose a dear one, her husband took a very wise decision in considering the future of those he would leave behind in the case of uncertainty, which became a reality.

In the same vein, the management of Industrial and General Insurance did the same when it paid N1million to the family of a policyholder who died just after contributing less than N100, 000 within a period of six months.

Before, only a few individuals, especially those with a notion of western civilisation, cherished the importance of having a life policy. But, unfolding developments reveal that more Nigerians are looking for easier ways to invest for the future of their beneficiaries and flexible investments that would yield good dividends while they are still alive.

Over the years, insurance operators have tried endlessly to educate Nigerians on the need to procure a life policy. Analysts believe that the life aspect of insurance operation, which is the backbone of the industry in many countries, has been relegated to the background here in Nigeria.

Experts believe that life insurance is the foundation of financial security for a man and his family with the sole aim of protecting individual financial resources against the uncertainties of life. Choosing a life insurance product is an important decision.

According to the Managing Director of Destiny Insurance, Mr. Sylvester Imarahi, the attitude of Nigerians towards life policy is highly influenced by cultural beliefs that taking such a policy would mean that the individual is already predicting his own misfortune.

However, a Deputy Manager with IGI, Mr Toye Morakinyo, told our correspondent in Lagos that a lot of people were beginning to wake up to the reality of having a life policy for their beneficiaries so they could leave something behind if the unexpected happens, adding that the policy was not all about benefits that comes only at death. He said they were of different types with some of them allowing for investment, which grows to maturity and could be reaped and renewed while the policyholder is still alive.

“Besides, once a life policy is taken, the insurer automatically becomes liable as soon as the first premium is paid. Even if the policyholder dies after paying the premium once, the insurer is expected to pay the whole sum assured. In the case of the Multi-Investment Policy operated by IGI, the moment the policyholder pays the first N8,000 and drops dead the following day, his beneficiary will be entitled to about N1million. The benefits that accrue from the policy and the sum assured are usually tax-free,” he added.

The Assistant General Manager, Special Products, Capital Express General Insurance, Mrs. Bola Odukale, Nigeria had previously recorded a slow response to life insurance policies, but in recent times, the demand for life policies has been on the increase, especially in the case of individual life where the policies are now made more flexible to suit individual needs.

She said some of the policies now came with the opportunity for investment, which makes it possible for policyholders to benefit from their savings while still alive, this gives the policyholder a veritable medium for investment as well as life protection.

She said, “Also, the ongoing reforms in the nation, such as the Pension Reform Act of 2004 has opened the door wide for group life insurance, the law now makes it mandatory for all organisations that have five or more persons under their employ, take up a group life policy on behalf of their employees. This forecasts a definite improvement in the response to group life insurance.

“Furthermore, the new required capital base for life underwriters will go a long way in changing the perspective of the insurable public towards life insurance companies and with the concept of life insurance as a whole.”

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Comments (6)

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Joel Efiong(Calabar, Nigeria)says...

This is a great piece. The examination bodies should hire you as ICT consultant.

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Sunday Mbe(Kaduna, Kaduna, Nigeria)says...

ULIMASI means' GOD,THANK YOU' not THANK GOD.

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Sunday Mbe(Kaduna, Kaduna, Nigeria)says...

The name ULIMASI is from the UTUGWANG tribe in OBUDU local government area of CROSS RIVER STATE in Nigeria.

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Okfold(Sobe, Edo, Nigeria)says...

I want the meaning of female owan name Ekeke (Edo state)

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Toluwalase Samuel Olufemi(Ijebu, Ogun, Nigeria)says...

Authority belongs to God, once He decrees it is final and binding