life insurance
Life insurance pays money to the people who depend on you if you die, so that your death does not also become their financial collapse.
In plain English
Nobody wants this conversation, which is exactly why it goes unhad in so many Nigerian homes until the day it is too late.
Life insurance is simple. You pay a premium. If you die while the policy is running, a sum is paid to the people you named. That money does not replace you. It replaces your income, which is the difference between a grieving family and a grieving family that also loses the house, the school, and the business.
You need it if anybody depends on what you earn. Children, a partner, ageing parents, a sibling you are putting through school. If nobody would suffer financially were you gone tomorrow, then you probably do not need it at all, and no salesman should convince you otherwise.
Term life is the honest version. You pay a modest amount for cover over a set number of years, and if you survive, you get nothing back. That feels like a loss and it is exactly the point. It is the cheapest way to buy the most protection.
Be wary of policies that mix insurance with investment. They usually do both poorly, and they earn the seller far more than they earn you.
You are 38, with two children in school. Term cover of ₦20 million for twenty years costs a manageable monthly amount. If the worst happens, the school fees continue and the family does not have to sell anything in a panic.
Questions people ask
How much cover do I need?
A common starting point is several years of your income, enough to carry your dependants through until they can stand alone. Count school fees and any debts that would remain.
What is term life insurance?
Cover for a fixed number of years with no payout if you survive. It is far cheaper than policies with an investment element, which is why it protects more for less.
Should I buy insurance that also invests?
Usually not. These policies tend to be expensive, opaque and mediocre at both jobs. Buy cheap protection and invest the difference yourself.
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