What to know before Buying Pure Life Insurance Policies in Nigeria

Pure life insurance policies; source: Uzochukwu Mike

As an insurance agent, I see a lot of things sometimes when I approach some prospects in Nigeria to buy one or two insurance policies. Sometimes it can be discouraging. In some cases, it is is usually bitter experience that may make me to start thinking of quitting the job. Why do I feel this way? What are the things these prospects usually tell me?

"Insurance does not work in Nigeria" is usually the statement of many prospects. Statement of this kind usually make agents in Nigerian insurance companies weak. But a professional in this field do not just take this view of many people about insurance in Nigeria. He digs deeper to explain some things about insurance to people with such philosophy.

That is not far from what we will be explaining here. This explanation will make you understand that there are rules and regulations guiding some kinds of insurance policies. If you know about these things, it will help you to keep to certain standard when buying such policies. All insurance policies are not the same. In respect to this, there are some kinds of insurance policies that your beneficiary may not be able to make claim if you default in making payments as agreed at commencement.

Things to know in Buying Term or Pure risk Policy in Nigeria

Term insurance policies are pure life insurance policies. They are the kind of policies whereby only the beneficiary to the policyholder get paid when the life assured dies. In this kind of insurance policy, no money is usually returned to the policyholder if he or she does not die within the specified time of the policy. It is a pure risk policy. It is one of the most delicate kinds of insurance policies to be bought in Nigeria. But there are some new designs of term insurance policies that cover the insured for accident and permanent disability also. But we are focusing on the one that covers the life insured for death.

What it mean is that if you buy this kind of insurance policy in Nigeria, you will not get any cash return until you die. Only your beneficiary or next of kin in a lay man's language gets paid when you die and you were making your payment as of when due before the incidence occurred.

Term insurance policies are not like other savings plans that insurance companies sell. So, if you miss one single monthly payment if you signed up to be paying every month, your beneficiary may not get any compensation in the form of monetary value if you die. That is how delicate term insurance policy is. So, know the kind of insurance policy you buy from Nigerian insurance companies and keep to the terms and conditions. Many people who said that insurance does not pay in Nigeria is because they bought term insurance policies and failed to fulfill their own part of the policy.

Product knowledge on pure life or term insurance policies 

There are many term insurance policies sold by insurance companies in Nigeria. Leadway Assurance company of Nigeria calls their pure life insurance policy, "Term Assurance". In FBN Insurance, the pure life insurance plans sold by the insurance company are Family Shield (FSH) and Family Income Protection Plan (FIPP). These term insurance policies are cheap but they are all delicate. If you are buying this kind of policy from any Nigerian insurance company, make sure you always pay your premiums as of when due.

What I mean is that if you agreed with the company to be making payment every month, make sure you pay every month as agreed. If you miss any month and die, no money will be paid to your family as claim. That is when you hear people complain that insurance companies in Nigeria do not pay claim. Insurance companies in Nigeria pay claim but when they may not pay in pure life insurance policy can be because the policyholder missed one or some due payments before he or she died. But the family of the life assured can make claim if the life assured paid the outstanding premiums before death. As I said before pure life insurance policies are delicate.

Another thing you should know before buying pure insurance policies in Nigeria is informing your family members or your beneficiary when you buy the policy. This will make them to be aware that you have that kind of policy with an insurance company. It will make them to know the time to go and make claim from the insurance company in case of your eventuality.

Also, many insurance companies have grace period of one year for the family of the life insured to report to them when the life insured dies. This is to enable them to make their investigation before paying claim to the family or the beneficiary. What this implies is that after one year of the death of the life assured, the insurance companies in Nigeria will not pay claim again. So, buyers of term insurance policies should disclose this kind of information to their families so that the family members will not have any difficulty when it comes to claim before they (the insured) die.

Note:

Endowment and savings policies of insurance companies in Nigeria is not as delicate as pure life insurance policies. So if you even miss some months of not making payments as agreed in the initial start time, you can still get paid at maturity. Though some insurance companies will like you to pay up to one year premiums if the policies are long term, example 5 years savings plan. But for pure risk policies or term insurance plans, missing one premium payment can deprive your beneficiary claim if the unforeseen happens.

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