- Decide who depends on your income, then choose cover that protects them.
- Compare policy types and total cost, not only the monthly premium.
- Read the exclusions and keep the policy documents safe.
The Short Answer
Life insurance pays a sum to your family if you die while the policy is active. It matters most when people depend on your income. Choose the type and amount based on their needs and what you can afford to keep paying.
Understand the Main Types
Term insurance covers you for a set period and pays out only if you die within it, usually at a lower premium. Whole life and savings-linked plans can last longer and may build a cash value, but they cost more.
Ask the insurer to explain in plain words how each type works and what you get back, if anything.
Work Out How Much Cover You Need
Add the costs your family would face: living expenses for several years, debts, school fees and funeral costs. Subtract savings and other cover you already have. The result is a starting point for the cover amount.
Review it when your life changes, such as marriage, a new child or a new loan.
What Affects the Price
Premiums depend on your age, health, lifestyle, the amount of cover and the length of the policy. Starting younger usually costs less. Be honest on the application form about your health and habits.
Wrong answers can lead to a rejected claim later.
Choose the Insurer Carefully
Check that the company is licensed by the insurance regulator. Look at its claims record, customer reviews and how it communicates. Compare at least two or three quotes.
Ask how claims are made and how long they usually take.
Read the Policy and Keep It Safe
Read the exclusions, waiting periods and conditions. Name your beneficiaries clearly and tell them where the documents are. Pay premiums on time to keep the policy active.
Review the policy every year or two.
A Worked Example
Suppose your family would need 2,000,000 naira a year for five years, plus 3,000,000 for debts and school fees. That is about 13,000,000. If you already have 4,000,000 in savings, the gap is 9,000,000, a sensible starting point for cover.
These figures are only an illustration, so use your own numbers and ask a licensed adviser.
Mistakes to Avoid
Do not choose a policy only because the premium looks small. Do not hide health details, because that can cause a claim to be refused. Do not forget to update your beneficiaries after major life changes.
Avoid agents who push a plan you do not understand or ask you to pay into a personal account.
Action Checklist
- List who depends on your income
- Estimate the cover your family would need
- Compare term and whole life options
- Check the insurer is licensed
- Answer the application honestly
- Name beneficiaries and keep documents safe
