Family first:Coronation Insurance details importance of life insurance

Cynthia Ezekwe

Coronation Insurance Plc, one of Nigeria’s leading insurance providers, has issued a call to action for Nigerians to secure the financial future of their families by investing in life insurance policies. The company emphasised the importance of life insurance in providing peace of mind and security for loved ones, should the worst happen.

In its report on the importance of life insurance, Coronation Insurance noted that purchasing a policy is the most generous gift an individual can give to their family, as it provides a financial safety net in the event of the worst happening. The report, titled “Insuring Your Life is the Most Generous Gift You Can Give, Don’t Leave a Legacy of Debt and Stress,” emphasises that by planning ahead, individuals can prevent their loved ones from being left with significant financial burdens, and instead leave a legacy of peace and security.

According to Coronation Insurance, life insurance can be described as “generosity born of love.” In a country like Nigeria, where many people live in poverty and face financial struggles on a daily basis, the company recognizes that life insurance can be a way to show love and care for one’s family and friends. 

“Most Nigerians work extremely hard all their lives to protect and provide for their families. As such, it doesn’t make sense that when they die, they often undo their life’s work, leaving their families a legacy of loss, debt and stress,’’ the report highlighted. 

Coronation Insurance further explained that life insurance is not only a financial tool, but also a way to show love and care for one’s family and friends. It argued that while the policyholder themselves may not benefit from the insurance in a direct financial sense, the peace of mind and financial stability that life insurance can provide for their loved ones can be a priceless gift. 

In the insurance company’s report, life insurance is defined as a contract between an individual and an insurance provider. Under this contract, the individual makes regular premium payments in exchange for a payout, or death benefit, to their beneficiaries in the event of their death. The report highlights that, in a country like Nigeria where social security systems are limited, this death benefit can provide much-needed financial security for families who have lost their breadwinner. The payout can be used to cover expenses such as funeral costs, outstanding debts, and everyday living expenses.

“Despite most people hoping for the best, we never know when we are going to die. Dying unexpectedly shortly after taking out a large loan, buying a car, a business or house can leave dependents not only without an income, but also in significant debt. If surviving loved ones don’t have the skills, savings or means to manage this debt, your death could condemn them to a life of poverty despite having worked all your life to ensure their security and happiness,’’ the report noted.  

Coronation Insurance further explained that the lack of life insurance coverage in Nigeria is placing a heavy burden on extended families and communities, as they are left to pick up the pieces after the death of a loved one. It noted that if more people in Nigeria took out life insurance policies, the resulting death benefits could help to alleviate poverty and drive economic growth, with resources freed up for investments in education, health, and business development. The report identified cultural taboos around death as a key factor preventing many Nigerians from taking out life insurance policies. 

According to the report, one of the most important benefits of life insurance is the financial security it provides for families after a loved one’s death. The death benefit can provide the surviving family members with a source of income to help them meet their basic needs and maintain their standard of living. This can be especially important if the deceased was the primary breadwinner of the family.

The report also emphasised that life insurance can protect families from falling into debt. If a person dies with outstanding debts, such as mortgages, personal loans, or credit card bills, these debts could be passed on to their family members.

Aside from providing income and protecting against debt, the report pointed out that life insurance can be used to fund a child’s education, helping to ensure that they have the financial resources to pursue their academic goals even if the policyholder is no longer around to provide for them. This can be especially important for families who may not have the means to cover the cost of education without the death benefit from a life insurance policy.

In addition, the report highlighted the use of life insurance for estate planning. It can help heirs to pay estate taxes and cover other costs associated with settling an estate, such as funeral expenses and legal fees.

The report also mentioned that life insurance is especially important for business owners, as it can be used to help with business succession planning. If a business owner dies, life insurance can provide the funds needed to buy out the deceased partner’s share of the business or help keep the company afloat during the transition period. This can help to protect the business and its employees, as well as the deceased partner’s family and other beneficiaries.

“More broadly, covers like whole life insurance are insurance solutions that provide you the opportunity of investment with embedded insurance protection against the risks of demise. The insurance premium is deducted within the period of investment but the insurance cover is for life, even when you have taken the maturity proceeds. The return on investment on this type of plan is flexible but high (Linked to Federal Government of Nigeria Bonds),’’ the report noted.

The report also highlighted the emotional benefits of life insurance, emphasising the peace of mind that comes from knowing that one’s loved ones will be financially protected in the event of death. This can allow individuals to focus on other goals, such as building wealth and planning for the future, without worrying about the financial impact of an untimely death.

According to the report, the knowledge that one’s family and loved ones will be taken care of in the event of death can provide a sense of calm and security that can be invaluable in today’s uncertain world. The report described this as a type of freedom that life insurance can bring, allowing individuals.

In light of the many benefits of life insurance, experts in the industry recommend that individuals take the time to evaluate their financial needs and choose a life insurance policy that provides adequate coverage for their family’s financial security. This may include meeting with a financial advisor to assess current and future needs and design a customised policy that meets those needs.