Experts push life insurance as catalyst for prosperity, stability 

• Heirs Life CEO wants awareness, utilisation
• Says its investment option that offers more

Cynthia Ezekwe

The global economic landscape is becoming increasingly volatile and unpredictable, leaving many investors looking for a safe harbour. Insurance, with its promise of financial stability and security, is emerging as an essential component of any well-rounded investment strategy. 

Within this space, life insurance is gaining traction as a critical tool that not only offers a safety net in the face of unexpected loss, but also provides a range of benefits that can support long-term financial growth and wellbeing. To this end, experts are now focusing on the importance of life insurance, emphasising its role in promoting peace of mind and resilience in an ever-changing world.

Reports show that contrary to popular belief, life insurance is not just a safety net for unexpected loss; rather, it is a multifaceted financial tool that offers a wide range of benefits. From providing a stable income stream and funding for business ventures, to supporting long-term wealth accumulation goals, life insurance has been recognised to serve as a crucial component of a comprehensive financial strategy.

With its unique blend of risk management, and  wealth accumulation, experts have explained that life insurance is no longer just about leaving a legacy, but about creating a living legacy – one that empowers individuals and families to achieve their financial aspirations, even in the face of uncertainty.

Insurance experts have often noted that life insurance holds the future of insurance sector growth in Nigeria due to the fact that it is a line of business that affects everyone.

A common misconception about life insurance is that it only benefits survivors after the policyholder’s death, which can lead people to believe that the premiums they pay are wasted if they don’t die during the policy term. This flawed understanding causes many to overlook the potential benefits of life insurance, which can offer a wealth of advantages while policyholders are still alive.

In reality, life insurance policies can provide a variety of benefits to policyholders during their lifetime, including the potential for cash value accumulation, access to living benefits in the event of terminal illness, and even leverage for financial planning and estate planning purposes.

Niyi Onifade, managing director and chief executive officer, Heirs Life Assurance, a member of Heirs Insurance Group, in a media chat, underscored the role of life insurance in long-term financial planning and emergency preparedness, stressing the need for increased awareness and utilisation of life insurance as a valuable tool for retirement savings, future financial projects, and children’s education.

The Heirs Life Assurance MD stated: “A life insurance plan offers what other types of investments cannot provide. The difference is in the name itself. A life insurance plan gives additional financial protection beyond what a customer has saved. That’s why we say that your savings aspirations are fully guaranteed whether you survive or pass away.

“Customers keep money with financial institutions with the hope that they will remain alive. While this is the way we all think, the reality is that things don’t always turn out that way. People die, and we all know what usually happens to the loved ones left behind. What the other financial institutions would do on the passing of a customer is to pay to the beneficiary the amount saved so far together with interest. Nothing more. Heirs Life, on the other hand, will go a step further to pay a pre-agreed sum to the beneficiary in addition to the accumulated savings and interest.”

Onifade highlighted the unique value proposition of life insurance, emphasising its role in securing the future of dependents. He pointed out that life insurance can replace the lost income of the breadwinner, should they pass away, ensuring that dependents can maintain their standard of living despite the loss of the primary income earner. 

This level of financial security, he explained, is made possible through the foresight of planning and investment in a life insurance policy.

“We all know what happens when a breadwinner passes away. We are familiar with how the wife and children are often without support in the absence of a life insurance cover. At Heirs Life, we help people realise the risks they face on a daily basis and provide them with fair, affordable, and sustainable products to protect them against those risks. Imagine a man who has obtained a loan to provide shelter for his family and suddenly drops dead thereafter. Without life insurance, his wife and children could find themselves under the bridge,’’ the Heirs Life Assurance MD noted.

Despite the numerous benefits of life insurance, Onifade acknowledged the various challenges facing the industry in Nigeria. Key among these are low penetration rates, due in part to a lack of understanding about the importance of life insurance and its accessibility, as well as misconceptions about the cost and benefits of life insurance.

To overcome the challenges faced by the life insurance industry, Onifade proposed several measures that could help improve the sector’s performance. These include simplifying products and processes to make them more accessible and understandable for consumers, enhancing education and awareness campaigns about the benefits of life insurance, leveraging technology to streamline operations and expand reach, and encouraging regulators to support innovation and growth within the industry.

Onifade asserted that by tackling these challenges head-on, the life insurance industry can unlock its full potential as a catalyst for financial prosperity and stability.