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9 Types Of Insurance In Nigeria

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Types Of Insurance In Nigeria – If you don’t have insurance as a Nigerian, then you should start thinking of purchasing one as the situation of the country should motivate you. Life is full of risks and uncertainties and in a country like Nigeria where you cannot predict the future events; you definitely need some that will cover you against damage or loss.

The benefits of insurance outweigh the cost of insurance and so there is no reason to be confused about it. There are various types of insurance policies that you are expected to have especially in Nigeria and we are going to be discussing them in this article.

Many Nigerians complain that the reason they do not buy the insurance idea is lack of information about how to go about getting insurance and who to rely on. But there is no reason to be confused anymore as we are here to give you full information about insurance and the types of insurance policies you should have in Nigeria.

Before we proceed, we are going to be talking about what insurance policy is.

What Is An Insurance Policy?

An insurance policy is a contract between an insurance company and an insured person or policy holder promising to pay or compensate the insured person for loss caused by damage under that insurance plan.

An insurance policy is tailored to meet a particular need and compensate for a particular loss or damage and the policyholder would have been paying some amount of money called premium.

With the insurance policy, the policyholder is being indemnified by the insurance company against specific loss or damage.

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You should know that it is only the losses or liabilities which come as a result of the direct or immediate cause of the event insured against that is indemnified. What we mean here is that there must be a link between the loss suffered and the risk that you have taken the insurance for. For instance, if you insured your car against fire but the car had accident, you will not be compensated as you insured against fire and not accident; it is called proximate cause.

Let’s proceed to what we have in the article

9 insurance policies you should have in Nigeria

  • Life Assurance

This is an insurance against the death of a person and the thing is that this insurance is not really given to you but to your beneficiary after your demise. In a nut shell, it protects the people that are financially dependent on you. You wouldn’t know the importance of this insurance policy until you see the breadwinner of a home die.

If you don’t want your children, spouse or other loved ones to be financially tortured by your death, then life assurance should be among the insurance policies you should have. It acts as a succor to your family members especially if you are a bread winner.

You should purchase a life assurance to replace the income you earn so that in the event of your untimely demise. It can also help in covering the burial cost too so your family members are relieved from that burden.

  • Home Insurance

Having to replace a home can really be expensive and this is why you need to have a homeowner’s insurance especially if you have a home of your own. This coverage will cover for the replacement of the structure and contents of the home.

You should know that the cost of rebuilding the house doesn’t include the cost of the land because the land is yours. Also, the cost of replacing the house could be more or less than the price you paid for it depending on the age of the house and the contents too.

Make sure your home insurance covers cost of any liability for injuries that might occur on your property.

The home insurance is not limited to only house owners as renters can also have insurance for the house they live in; it is called the renters insurance. This renters insurance covers the personal assets or properties of the tenant of a house. It could include additional living expenses, liability, medical payments and any other dwelling cost.

So you see that whether you are a house owner or tenant, you will need to have an insurance policy to cover you in case of loss incurred.

  • Health Insurance

This is one of the most popular insurance policies and it is obvious why people have health insurance; health is really important and with the rising cost of medical care, many people have seen the reason to have this health insurance.

Sometimes, the more serious your injury, the higher the cost of your hospital bill and don’t you think it will be better to have a coverage for these unplanned health issues?

The cost of having health insurance might be high and seem like a financial burden to you but the truth is it is better than not having any health coverage as the cost of not having health coverage is higher.

If you are an insured person and you meet with an accident or diagnosed with a severe ailment, be sure that the insurance company with which you got the insurance policy will bear the expenses.

  • Automobile Insurance

This is for those that have vehicle and it is a law in most countries. This insurance is something you shouldn’t skip regardless of the kind of car you are driving. The insurance will cover you in case of injuries from accident, the vehicle and also damages caused to others by your vehicle so you shouldn’t neglect this insurance policy.

If you don’t have a vehicle insurance policy and you are involved in an accident where someone is injured or their property is damaged, you may be subjected to a lawsuit where you could lose everything you own.

The cost of having vehicle insurance is not as expensive as the cost of not having this insurance policy as it puts everything you own at risk when an accident occurs especially a tragic one.

  • Long-Term Disability Insurance

People tend to ignore or get discouraged about purchasing this insurance policy because of the cost but it is a very important insurance policy to have owing to the fact that you cannot predict what happens to you in the future and how your life can turn out to be. Nobody wishes for something bad to happen to them but you can actually prepare for it.

This insurance policy is coverage to protect or cover you in a situation where you are unable to work due to illness or injury caused by accident. With this insurance, you will be able to take care of yourself for a long time even when you retire from active work.

The long-term disability insurance will cover you for as long as five to ten years and even to the time you retire. With this insurance policy, you will be able to continue enjoying your current lifestyle even when you can no longer work.

  • Travel Insurance

This insurance gives you a level of peace while traveling especially if you are traveling outside Nigeria. It provides cover for damages due to accidents, medical emergencies and emergency evacuation. With this kind of insurance at your disposal, you will certainly have peace of mind when traveling and this will help to boost your mental state of mind.

  • Business Insurance

The rate at which entrepreneurs are entering into the market has made this insurance policy an important one and if you have a business, you wouldn’t want to neglect this insurance policy.

This is an insurance policy to protect your business from loss due to events that occurs when carrying out your normal course of business. If you own your own business, you will have to take up a business insurance policy. Depending on your business, you will have to take up an insurance policy against property damage, employee-related risks and law suit.

  • Cash in Transit and Bad Debt insurance

The Cash in Transit insurance policy as the name implies helps to provide compensation to the insured person in events of cash being stolen either from the business premises, home or while the cash is being carried to the bank.

The Bad debt insurance policy provides cover for debts that may not be paid by debtors to the business. Giving out loan has a risk of non-repayment and this leads to bad debts so this policy is a cover against not payment of loan given to a debtor.

These two insurance policies are mostly for businessmen and it is becoming important in Nigeria because of the situation of the country and also because businessmen always fall victim of bad debts and loss of money in transit.

  • Mobile phone insurance

The insurance policy is gaining ground in Nigeria presently and this is because a lot of people now see the importance of having a cover to protect their expensive tech gadgets and accessories and so it is not only limited to phone as your computers can be included.

Final Note

There are a lot of risk and uncertainties tied with our daily activities and so we need insurance against these uncertainties and if you don’t have an insurance policy in Nigeria, you should start considering having one and you should know that insurance is not only for the rich as everybody should have an insurance as it will serve as a succor for your family members when you are no more especially if you are the breadwinner of the family.

READ ALSO: How to Immigrate to Canada from Nigeria in 2021

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