Endowment life insurance policies in Nigeria are gaining popularity daily due to their dual benefits of life insurance coverage and savings. Given the way Nigerians are relocating (The Japa crews) out of the country while a lot of extended family expenses still wait for them on a monthly basis, there is absolutely an urgent need for families to protect themselves, most especially the breadwinner (head of the family). These policies help to provide financial protection in case of the policyholder’s death and a lump sum payout if the policyholder survives the term. Moreso, certain cover extensions and riders exist to further enhance the value of these policies. 

Do you know why every Nigerian family deserves to consider an endowment life insurance policy, whether they are within or outside the country? Below details explain further:

Opportunity for  Dual Benefits of Protection and Savings

An endowment life insurance policy serves two critical functions: it provides life insurance coverage and acts as a savings plan (which means, you can eat your cake and still have it). This dual benefit ensures that families have financial security in the event of the policyholder’s death and a significant lump sum available for future needs if the policyholder survives the term – Fantastic right?!.

For example, consider the Okeke family in Lagos who purchased an endowment policy to ensure that their children’s education is financially secure. If either parent were to pass away, the policy would provide a death benefit to cover immediate expenses. If they both survive the policy term, they would receive a lump sum that can be used for their children’s higher education or starting a family business.

Here’s why every family should consider an endowment life insurance policy.

Types of Endowment Life Insurance Policies

1. Full Endowment: This policy guarantees a payout equal to the sum assured plus bonuses, providing substantial savings at the end of the term or in the event of the policyholder’s death.
2. Low-Cost Endowment: Designed to provide life coverage while also saving for a specific goal, such as a mortgage. It typically has lower premiums but aims to meet a specified financial target.
3. Unit-Linked Endowment: Combines life insurance with investment in a range of funds. The payout depends on the performance of the chosen investment funds, offering potential for higher returns.

Cover Extensions and Riders

Adding cover extensions and riders to an endowment policy can provide tailored protection to meet specific needs:

Accidental Death Benefit Rider: Provides an additional payout if the policyholder dies due to an accident. In Nigeria, where road accidents are frequent, this rider offers significant additional support. For example: Mr. Oladipo from Lagos included an accidental death benefit rider in his policy. After he tragically died in a road accident, his family received an extra sum, which helped them manage immediate financial challenges.

Critical Illness Rider: Ensures a lump sum payout if the policyholder is diagnosed with a serious illness such as cancer or heart disease, covering high medical costs. For example: Mrs. Ijeoma in Abuja was diagnosed with a serious illness. The critical illness rider on her policy provided funds for her treatment, ensuring she could access necessary medical care without depleting family savings.

Waiver of Premium Rider: Waives future premiums if the policyholder becomes disabled and unable to work, ensuring the policy remains in force without financial strain. For example: Mr. Chukwudi in Enugu suffered a disabling injury. The waiver of premium rider allowed his policy to continue without further payments, maintaining financial security for his family.

Conclusion

Endowment life insurance policies, with their various types and the option to add cover extensions and riders, offer comprehensive protection and savings benefits. These policies ensure financial security in case of death, provide significant savings if the policyholder survives the term, and offer additional tailored protections through various riders. Every family in Nigeria should consider investing in an endowment policy to secure their financial future and gain peace of mind.