Why do we need insurance?

Why do we need insurance?

One can never predict the future as life has its own way of unfolding. Therefor to provide protection for yourself, family, investment and business, an insurance policy is needed. Insurance is a way of managing risks and having a safety net if the unexpected happens.

Disaster could happen in any form, car breaks down, roof leaks, a major home fire, an automobile accident that leads to a legal action and someone in the family becomes ill.

When an insurance policy is purchased, you transfer the cost of a potential loss to the insurance company in exchange for a fee, known as the premium. There are certain rights and protections you have under the law.

At different stages of your life, you will have different insurance needs, so it is recommended to review your policies at least once a year to make sure you have the best policy to fit your lifestyle.

Having insurance helps you with:

· Owning a home, because mortgage lenders need to know your home is protected

· Driving vehicles, because few people could afford the repairs, health care costs and legal expenses associated with collisions and injuries without coverage

· Maintaining your current standard of living if you become disabled or have a critical illness

· Covering health care costs like prescription drugs, dental care, vision care and other health-related items

· Providing for your family in the event of a death

· Running a small business or family farm by managing the risks of ownership

· Taking vacations without worrying about flight cancellations or other potential issues

It’s always good to take the best course of action and be prepared for the worst. Taking out the right insurance policy will go a long way towards helping you safeguard your earning power and your possessions. There are endless types of insurance, from policies that protect airplanes to those that cover websites. But there four that are most important for individuals and families – Life insurance, motor insurance, homeowners insurance and health insurance.

When taking out any type of insurance, take the time to review the policies to ensure to covers your needs, as a little knowledge can make a big difference when it comes to buying the right insurance protection.

How third party insurance works

How third party insurance works

It is compulsory to have motor insurance in Nigeria in order to have a motor vehicle on the road. Many drivers choose to take out third party insurance as it is cheaper than the comprehensive but don’t realize it does not cover their own car. Drivers in Nigeria also only take out third party insurance as they see it as one of the vehicle documentations they have to carry about to prove their ownership of their vehicle.

Third party insurance - the first party is you, the second party is the insurance company and the third party is everyone else. With third party insurance you cannot claim for the car you are driving regardless of whether it is a brand new car, to have your car protected it is recommended to get the comprehensive cover for it.

There are a few things you should know about third party insurance:

· If you are responsible for a crash – you maybe be responsible for paying to repair another vehicle or covering its driver’s medical costs. Third party liability coverage protects you against these claims, covering the cost of damage and injuries sustained in a crash in which you were at fault.

· The money to pay for damages comes from the premiums. If premium has not been paid for a third party motor insurance, there won’t be any compensation whatsoever, in case of accident.

· If you go for a third auto party insurance from a registered insurance company, you will be able to save yourself of the cost associated with causing damage to others.

· If the insurer thinks you are not acting ‘in good faith’, they will refuse to pay that claim, cancel your insurance, report you to the police for fraud and put you on a blacklist.

· Claim you can make on an auto insurance policy is limited - find out the limit to the loss the insurance policy covers before taking out the insurance.

Where many drivers think it’s best to get third party insurance, it is in fact better to have comprehensive insurance as it covers everyone involved in an accident.

Benefits of Eduplan

Benefits of Eduplan

Nigeria is the most populated country in Africa, with approximately double the population of both Ethiopia and Egypt, and for the Nigerian education system this means incredible new demands that the government is currently hard pressed to meet. The number of students has grown from under 15,000 in 1970 to approximately 1.2 million today.

Education Insurance

With education becoming an important part of a child’s future and expenses for education rising, it is only natural for parents to want to secure their children’s future, which is why education insurance is the way. Education insurance, Eduplan as many call it, gives a child or children the security they need in any unforeseen event.

Why have Education Protection?

Having education insurance means the provider of the family can ensure that the education of his dependants is not unduly terminated because of an unexpected event. Many plans also provide a medical expense cover for the child for injuries sustained whilst engaged in school related activities on the school premises. Parents like to choose the right plan for their children, each plan and its cover is carefully designed to suit individual needs, such as:

· Policy designed solely to child for a child’s Education

· School fees paid directly to the school until the completion of the child’s education

· Single premium

· Fixed sum assured

· Fixed premium

· Guaranteed payment of fees and other educational requirements

· Medical cover

· The premium is tax deductible

· The benefit is tax free

· Instalment premium payment allowed

When choosing an education plan it is important to know exactly what a child will need if anything was to happen to the family provider.

Which insurance products should a business have?

Which insurance products should a business have?

In Nigeria it is compulsory for all businesses to have Employer’s Liability Insurance, to protect the employee. There are many other optional insurance products available to Nigerian businesses to help protect them against financial turmoil as well as natural disasters. Below we have compiled a list of insurance products we recommend businesses to have.

Public Liability Insurance

This type of policy protects a business from any claims made for damages by a member of public who has entered the business premises. This policy is highly recommended for shops and retail premises.

Business Building Insurance

Like homes, businesses premises need to be protected from the inevitable – burglary, fire or flood damage. We recommend this for anyone with valuable physical stock and perishable goods. A fire and other perils insurance normally covers the following:

The items to be insured are usually made up of the following:

· Buildings.

· Office Furniture, electrical & electronic equipment.

· Plants and machineries.

· Stock of raw materials and finished goods.

· Loss of annual rent for alternative accommodation.

Professional Indemnity Protection

Professional indemnity, or PI insurance, gives professional businesses protection against claims made by their clients, for any damage caused by professional negligence. This form of policy is recommended to professionals such as engineers, architects, doctors and pharmacists.

Key person Insurance

We hate to think about it, but what would happen to your business if one of your key staff were to die? This is an insurance cover purchased on the life of a key person within the organisation to protect the company against loss of profit or cost of replacing the key person in the event of demise.

Business Continuity Insurance

Also referred to as “business interruption insurance”, this type of insurance will protect the business against any disruption that could lead to loss of revenue, such as a fire or natural disaster.

The items normally covered by this policy are:

· Gross Profit

· Salary and Wages

· Auditor's fees

Group Life Assurance

Group Life Assurance

Group Life Assurance is an insurance that covers a group of people, usually they are members of a society, employees of a common employer, or professionals in a common group. Group Life Assurance pays out a lump sum death benefit to the employees’ family or next of kin should that individual die whilst employed by the organisation.

Group Life Assurance characteristics are as follows:

· There must be a group of people to be insured which should have something in common other than the purpose of obtaining insurance

· There must be a Master Policy Holder who will retain the contract on the behalf of the member and the carriers

· Such covers are typically available at a discount to the respective individual rates

Group Life Assurance remains in force until your employment is terminated or until the specific term of coverage ends. There is also an option of converting your group coverage to an individual policy if you leave your employer. Many employees choose not to do this as conversion premiums tend to be much higher than premiums for comparable policies available to individuals.

Benefits for employers - A more competitive and attractive benefits package helps recruit and keep the right staff. Premiums will normally qualify for tax relief depending on scheme choices, including Excepted Group Life policies, also known as relevant life policies. Usually costs less than 1% of payroll depending on the level of cover.

Benefits for employees - Peace of mind for them and their loved ones. Lump sum and dependants' pension benefits can be paid without waiting for probate and free of inheritance tax. This valuable cover is not classed as a benefit in kind.

Group Life Assurance is one of the many employee benefits available for employers to offer their staff. Other benefits include pension schemes, group income protection schemes providing a replacement income if an employee is off work long term and group medical insurance plans.

The following additional but optional benefits can be taken out:

· Group Personal Accident

· Funeral Expenses

· Repatriation Expenses

· Severance Benefit

Protecting your home from burglary

Protecting your home from burglary

Most burglary insurance comes as part of homeowner‘s insurance, which covers a limited amount of personal property. There are certain valuable items which require cover beyond the normal scope of Fire and Burglary policies. This is called breakage and pilferage risk, this compensation is for loss or damage to the property insured by any accident or misfortune. Items that can be covered in addition includes:

· Wearing Apparels

· Jewellery & Personal Ornaments

· Trunks & Suitcases

· Fountain Pens, Gold & Silver Wares etc.

· Surveying Instruments

· Tools of Trade

· Sport Requisites

· Household effects

· Cookery and Glassware

· Pictures, Books

· Miscellaneous Equipment

Nigeria Insurance

In Nigeria, burglary insurance prices are the almost the same regardless of where you live. In rural areas or those with low median crime rates will get lower premiums, while those living in urban or high-crime neighbourhoods will have to pay higher rates. To get lower premiums, there are specific things which can be done:

· Doors with deadbolts

· Locking security windows

· Adding an alarm system

· Residing in areas with neighbourhood watch

· Anti-theft bars and windows and gates

· Safes for valuables

Burglary Insurance

Taking out burglary/home insurance may seem like a hassle but in the end it will; be worth it when the unexpected happens. It is also very handy to make a list of the most-valuable-items and its price next to it. Along with the list keep there is also three other thing you can do:

· Keep the receipts – it shows identifiable serial numbers proof of purchase and the item’s original value.

· Instruction manuals - also act as proof of purchase as they contain identifiable serial numbers for each of your items.

· Take digital photos – if possible email them to yourself, or, physical photos stored in a safe place will work too.

Life Insurance Money Saving Tips

Before you set off to buy life insurance always check that you are not already insured via another policy. For example if you are employed, you might be eligible for ‘death in service’ benefit, which typically pays out a lump sum if you die while still working for the company.

Compare life insurance premiums

You will find that life insurance premiums vary from one insurer to another, always shop around for the best price. But, remember that the cheapest may not always be the best – ensure the policy meets all your requirements. Seek professional advice if you are not sure.

Pick the right type of life insurance cover

There are two main types of life insurance cover – Term Insurance and Whole Life Assurance.

Term insurance is typically cheaper than whole of life cover as it pays out only if you die within the policy term. Whole of life cover lasts until you die, whenever that might be, and so is guaranteed to pay out.

Choose the correct period of insurance

Longer term policies tend to be more expensive as the longer the policy term the more likely you are to die and result in a claim. Pick a term that suits your needs.

Insure the right amount

The larger the claim amount is the larger your premium will be, pre-determine how much your loved ones will need after your death. Insure the correct amount and avoid paying larger premiums.

Buy when you’re young

This is an easy way to avoid paying large premiums, if you buy your policy when you are young you will benefit from lower premiums. You can save money by arranging cover in your 20s or 30s, rather than in your 40s and 50s. 

Quit Smoking

It’s a bad habit and we all know how detrimental it is to your health. Smokers pay more for life insurance than non-smokers, so kicking the habit can be good for your wealth as well as your health.

Joint life insurance cover

Like with most things in life, when you buy two you are likely to get a discount and pay less for your premiums compared to 2 single policies. But remember most insurers pay out only on the first death. When the survivor dies, the family cannot lodge another claim

9 Tips to help lower your home insurance

9 Tips to help lower your home insurance

Insuring your home is a must, content insurance as well as building insurance help protect you against fire, burglary and natural disasters. With insurance in place one can be rest assured that they have the adequate cover in place to replace and rebuild. However, home insurance can be expensive if you do not supply the correct information.

Here are 9 top tips on how to avoid overpaying on home insurance;

1. Add insurance approved locks on all windows and doors – then make sure you use them to keep your insurance validated. Let your insurer know so they can apply a discount.

2. Add a burglar alarm – not only does this add piece of mind but a burglar also helps lower insurance premiums, but of course make sure you use it. Again, let your insurer know of the precaution you have taken.

3. Increase your premium excess – in most cases this will instantly lower your premium. Make sure you are comfortable with the excess, as this is what you will have to pay if you have to make a claim.

4. Join up to your local neighbourhood watch scheme - Some insurers offer discounts if you live in a neighbourhood watch area.

5. Try to avoid making claims – no claims history will help insurance companies give you a better rate. It is better not to make claim for small or low value items.

6. Accurately state your age – the older you are the less likely you are to make a claim, this is according to insurers.

7. Extra Precautions – add a safe to the house and let your insurance company know.

8. Describe your lifestyle – insurers tend to give better discounts to those who do not smoke, drink or have pets, so accurately and honestly describe your lifestyle.

9. When it comes to renewal, do not just go with your current provider, always shop around and ask for discounts.

Other tips include, making sure you do not over value your home, building or contents. By over estimating you will only be paying an extra premium, the insurer will only pay out the market value. Check the policy for additional cover items such as “lost keys” if you do not need this cover ask for it to be removed and a discount applied.

Avoid covering items twice, for example your mobile phone may be protected by your bank account already therefore your home insurance policy does not need to, again remove this and ask for a discount to be applied.

Most popular insurances in Nigeria

There are many different types of insurance available in Nigeria but the most popular three insurances that are taken out every year is motor insurance, home insurance and life insurance.

Motor Insurance

Most people need a car to commute to work or need it for work, so having insurance is a necessity. Different insurance companies offer different types of insurance packages for you and your car. Motor insurance is there to protect car owners against various risks associated with vehicle ownership.  There are two levels of cover, Comprehensive and Third.

• Third Party - The Third Party policy protects against death or injury arising from the use of the insured car and damage to a third party’s property.
• Comprehensive – it covers accidental collision or overturning caused by mechanical breakdown or wear and tear, fire, explosion or lightning strike, theft and malicious acts. The Comprehensive policy also includes Third Party cover and protects against damage to the insured vehicle. 

Home Insurance

There are many different packages available for home insurance. A lot of people choose to get everything covered in their house, while others only chose to cover what is important to them. There are various types of insurance packages available:

• Fire and Allied Perils - designed to cover for loss or damage to properties as a result of  fire, lightning, limited explosion and other special perils.
• Burglary - designed to protect you against loss or damage to property caused by a theft that involves the forcible and violent breaking into or out of the premises.
• All Risk Insurance - provides cover against loss of, or accidental damage to, items that are movable in nature.

Life Insurance

Life insurance is a source of income, in case of your death, for your children, dependents, or other beneficiaries. Life insurance can also serve other estate planning purposes, like giving money to charity on your death, paying for estate taxes, or providing for a buy-out of a business interest. There are two types of life insurance:

• Term - you pay for coverage for a specified amount of time, and if you die during that time the insurer pays your survivors the death benefit specified.
• Cash value - referred to as whole life, universal life, or permanent life insurance, where, in addition to paying a death benefit, it also provides you with some other redeemable value.

Motor insurance Policies

Motor insurance Policies

Motor insurance is a necessity for car drivers in Nigeria. The costs for repair/replacement of the cars or other property, or medical costs of the victims are far too high to risk being without coverage. Most motor insurance products are divided into two categories - third-party liability and first-party insurance.

The owner of the policy is the first party, who has contracted with the second party, the insurer, for the coverage; and the third-party is the other person(s) in the accident, or the person(s) whose property the policy-owner damaged.

Third-Party Liability

There are two types of third-party liability policies:

·         Bodily injury liability – this pays other people for damages the policy owner has done to them, such as medical expenses , lost wages , and pain and suffering

·         Property damage – this pays other people for damages done to their property

First-Party Expense

There are many forms of First-party coverage, out of which some are essential. First-party coverage is used to repair damages to the policy-owner and his or her passengers in the event that:

·         The policy owner was not at fault in the accident

·         No one was at fault in the accident

·         The driver at fault cannot be found (e.g., a hit-and-run)

·         The driver at fault does not have adequate means to repair the policy owner’s damages

The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and Medical Payments/Personal Injury Protection (PIP) insurance:

·         Collision/Comprehensive - Collision coverage guarantees the policy owner’s car will be repaired or replaced in the event of an accident, no matter who was at fault.

·         Uninsured/Under-insured – Uninsured/Under-insured Motorist coverage pays the policy owner and his or her passengers for pain and suffering, lost wages in the event that the driver at fault cannot be found, has no insurance, or has too little insurance to cover the damages.

·         Medical Payments - Covers medical and funeral expenses to the policy-owner and his or her passengers, regardless of who is at fault in the accident.

·         Non-Policy-Owners - Pay out appropriately regardless of who is driving the car at the time of the accident.

·         Stolen Cars - The owner of a car is not responsible for third-party damages resulting from or during the theft of his/her car.