disability insurance
Disability insurance replaces your income if illness or injury stops you working, and it protects the asset most people never insure.
In plain English
You insure your car. You insure your phone. You have probably never insured the thing that pays for both.
Your ability to earn is the largest asset you own for most of your life. A thirty year old earning ₦500,000 a month will earn well over ₦180 million before retirement, before any raise. No car you will ever own comes close.
Disability insurance pays you an income if illness or injury prevents you from working. Not death, which is what life cover handles. The far more likely event, which is that you survive and cannot work.
That distinction matters enormously and almost nobody thinks about it. A person who dies stops costing money. A person who cannot work still eats, still needs housing, still has children in school, and now has medical costs on top. In many ways it is the harder outcome, financially, and it is far more probable.
Cover of this kind is less available in Nigeria than it should be, and where it exists it is worth asking about, particularly through an employer or an association.
Where you genuinely cannot obtain it, the answer is the same as ever, and it is unglamorous. A larger emergency fund, and income that does not depend entirely on your own two hands.
A self employed engineer suffers a serious injury and cannot work for fourteen months. He survives, which means the life insurance pays nothing. His income stopped, his costs rose, and his savings lasted five months.
Questions people ask
How is this different from life insurance?
Life cover pays when you die. Disability cover pays when you survive and cannot work, which is more likely and often more financially damaging.
Is it available in Nigeria?
Less widely than it should be. Ask your employer, your association and a registered broker, since group schemes are the commonest route.
What if I cannot get it?
Build a larger emergency fund than seems necessary, and work towards income that does not depend entirely on your own labour.
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