Insurance Policies In Nigeria – When you buy insurance, you’re buying a secured future. It’s a secured future that if something catastrophic happens to your business, your carrier is going to assist you to make your business whole again. Sometimes, though, it’s tempting to question the value of insurance because it is an intangible product.
There are various insurance companies offering different types of Insurance Policies In Nigeria. Federal Government has made some of the Insurance Policies compulsory for every individual and business in the country to be protected. Such insurance policies are:
- Health Care Professional Indemnity
- Insurance of Public Buildings
- Marine Insurance
- Motor Third-Party Insurance
- Employee Group Life Insurance
- Insurance of Buildings under Construction
- Aviation Third Party Insurance
Insurance can be a mysterious and puzzling thing. How does insurance work? What are the benefits of insurance? And how do you find the best insurance for you? These are common questions revolving around it.
Insurance is an important financial tool. It can help you live life with fewer worries knowing you’ll receive financial assistance after a disaster or accident, helping you recover faster.
What Is Insurance?
Insurance is the financial protection from contingent or uncertain loss. It includes a contract represented by a policy in which an entity or individual is reimbursed against losses such as bodily injury, loss or damage to property.
Insurance encourages investment by minimizing funds or capital that entities need to have at hand for protection from unforeseen circumstances. It is one of the determinants of a successful economy.
Insurance in Nigeria is regulated by the National Insurance Commission (NAICOM). It is the body in charge of establishing standards for the conduct of insurance business in Nigeria and also in charge of approving standards, conditions and warranties applicable to all classes of insurance business.
Why Insurance Plans are Important
Insurance plans are important for anyone looking to protect their family, assets/property and themselves from financial risk/losses: Insurance plans will help you pay for medical emergencies, hospitalisation, contraction of any illnesses and treatment, and medical care required in the future.
The following are the reasons why Insurance plans are important:
1. Protection for you and your family
Your family depend on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens.
2. Reduce stress during difficult times
None of us know what lies around the corner. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced, and you can focus on recovery and rebuilding your lives.
3. To enjoy financial security
No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.
4. Peace of mind
No amount of money can replace your health and wellbeing – or the role you play in your family. But you can at least have peace of mind knowing that if anything happened to you, your family’s financial security is assisted by insurance.
5. A legacy to leave behind
A lump sum death benefit can secure the financial future for your children and protect their standard of living.
Best Insurance Policies In Nigeria
Insurance policies helps your family maintain their standard of living in case you are not around in the future.
This will help them cover the costs of running the household through the insurance lump sum payout.
The insurance money will give your family some much-needed breathing space along with coverage for all expenditure in case of death/accident/medical emergency of the policyholder.
There are several types of insurance plans policies in Nigeria. Some of the commonly preferred ones include the Life insurance : Life insurance is what you can avail in order to safeguard your family in case of your death during the tenor of the policy.
The most basic form of life insurance available to buyers is term insurance. Life insurance helps secure your family financially with a lump sum amount that is paid out in the event of the policy holder’s death within the policy period
Health insurance: This is purchased for covering medical expenses revolving around various health issues, including hospitalisation, treatments and so on.
These insurance plans come in handy in case of medical emergencies; you can also avail of cashless facility across network hospitals of the insurer. Here are the list of the best Insurance Policies In Nigeria:
1. Individual Life Insurance
Individual life insurance is a policy that is paid by one person and covers a single person. It is distinguished from group life insurance, which covers employees of a company or members of an organization.
This insurance is intended to meet the financial needs of a surviving spouse or family members in the event of the insured’s death.
Individual life insurance, however, has more flexibility in terms of coverage, allowing the policyholder to choose the coverage they want.
Individual life insurance has a death benefit for the named beneficiary. This benefit is aimed to easing the burden of survivors who must cope with the financial loss associated with the insured’s death.
Two of the more popular individual life insurance policies are term life insurance and whole life insurance.
2. Group Life Insurance
Group life insurance products offer benefits to a group of people. Group policies are affordable and the cost of insurance is much lesser than for an individual policy. The insurance cover will be provided to a group of people under a single master life insurance policy.
Group life insurance is a single contract for life insurance coverage that extends to a group of people. By purchasing group life insurance policy coverage through an insurance provider on a wholesale basis for its members, companies are able to secure costs for each individual employee that are much lower than if they were to purchase an individual policy.
Those receiving group life insurance coverage may not have to pay anything out of pocket for policy benefits. People who choose to take more-advanced coverage alongside it may elect to have their portion of the premium payment deducted from their paycheck.
Just as with regular insurance policies, insured parties are required to list one or more beneficiaries before the policy comes into effect. Beneficiaries can be changed at any point during the coverage period.
3. Health Insurance Business
The different types of health insurance, include:
- Health maintenance organizations (HMOs)
- Exclusive provider organizations (EPOs)
- Point-of-service (POS) plans
- Preferred provider organizations (PPOs)
Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over numerous persons.
By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement
4. Fire insurance
Fire insurance is a property coverage that pays for damages to property and other losses you may suffer from a fire. It covers the cost of repairing or replacing damaged property in your home, along with the costs of accommodations while your home is unusable.
Fire insurance is a type of insurance coverage that is typically included in your homeowners insurance policy and covers the costs of damages to your property due to a fire.
This coverage also includes your personal belongings and any expenses for lodging and meals above and beyond your normal living expenses, up to the policy limits.
As part of your homeowners policy, it’s subject to the same deductible and coverage limits as the rest of your policy.
Types of Fire Insurance Policies
- Valued Policy.
- Valuable Policy.
- Specific Policy.
- Floating Policy.
- Average Policy.
- Excess Policy.
- Declaration Policy.
- Adjustable Policy.
- Maximum Value of Discount Policy.
- Reinstatement Policy.
- Comprehensive Policy.
- Consequential Loss Policy.
- Sprinkler Leakage Policies.
- Add on Covers Policy.
- Escalation Policy.
5. Motor vehicle insurance
Motor vehicle insurance, also called automotive insurance, a contract by which the insurer assumes the risk of any loss the owner or operator of a car may incur through damage to property or persons as the result of an accident.
There are many specific forms of motor vehicle insurance, varying not only in the kinds of risk that they cover but also in the legal principles underlying them.
Vehicle insurance is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle.
6. Oil and gas insurance
Oil and Gas Insurance is an insurance policy that covers human life, the environment and property from any accidents and oil and gas organization activities.
The oil and gas industry consists of series of procedures, chemical reactions and harsh and difficult working conditions which tend to increase the risk to cost-intensive property, human life and environment.
Thus, the industry needs to be insured to cover certain proportion of the liability in case of any accidents.
7. Bonds credit guarantee insurance
Credit guarantees allow you to increase your credit lines by offering suppliers protection against your own company’s insolvency.
These can be arranged either to cover the whole existing credit line or as a top-up to your existing facility.
The expertise in this market includes the following:
- Rent / Tenant Default Guarantees
- Duty Deferment Bonds
- Performance Bonds
- Advance Payment Guarantees
- Bid / Tender Bonds
- Deferred Consideration
- Supplier Payment Guarantees
- Commercial Performance Guarantees
- Local Authority Bonds
8. Motor Third-Party Insurance
People who have been caught by law enforcement agents while driving, for not having insurance, may be able to relate to this. To ensure the safety of road users, the government has made it compulsory for citizens and residents to have motor insurance before plying public roads.
9. Employee Group Life Insurance
Are you an employer of labour? This is for you. The employee group life insurance requires that every employer of labour with five or more employees must take out a life insurance policy on each of these employees.
The sum is at least three times the annual total compensation for the employee and applies to employees in the private and public sectors.
10. Health Care Professional Indemnity
As a patient, are you aware that every licensed healthcare provider must obtain insurance before treating you? Health care professionals are required to obtain insurance that will protect their patients in case of accidents or fatalities resulting from professional negligence.
A health care provider comprises any registered government or private healthcare practitioner, hospital or maternity centre.
11. Insurance of Public Buildings
Did you know that your favourite shopping mall and hangout spot ought to be insured? The law provides that every public building must be insured against liability in the case of loss, damage to property, death or bodily injury that may be caused by collapse, fire, earthquake, storm or flood.
A public building refers to any building accessible to people for educational, medical, recreational or commercial purposes.
12. Insurance of Buildings under Construction
Site workers’ lives matter! This is why the owner or contractor of any building under construction with more than two floors, must undertake insurance from the construction stage.
The purpose is to guard the public against construction risks that may be caused by negligence on the part of the contractor resulting in bodily injury, loss of life or property damage.
13. Aviation Third Party Insurance
Fly with cover! Aircraft operators in Nigeria are not permitted to operate without first undertaking this insurance policy. The policy involves three parties namely; the aircraft operators, the insurance company and the third party i.e. passengers, employees and the public at large.
The aim is to provide cover in the case of accidental injury, death or property damage to third parties caused directly by the aircraft.
14. Marine Insurance (Cargo)
If you’re planning on starting your own container shipping business, this is for you. Individuals and organizations that regularly engage the use of marine transportation are required to obtain marine insurance.
It covers for losses that may occur as a result of marine adventures, from the use of vessels and yachts as a means of transportation.
