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Friendly Nigerian Greeting
Hello again, my smart friend! You’ve been doing so well on this journey, and I’m proud of you. Today, we’re going to discuss something very close to home—What is Life Insurance I. It’s one of the most thoughtful ways a person can care for the people they love. So settle in, let’s learn how life insurance works and why it matters so much.
What is Life Insurance I
Introduction
Have you ever thought about what would happen to a family if the breadwinner passes away? Or if something unexpected makes it impossible for a parent to continue supporting their children? These situations are tough, but life insurance helps ease the burden.
Life insurance is about protecting those you love. It’s a way of saying, “Even if I’m no longer here, I’ve made plans to take care of you.” It’s more than money—it’s peace of mind. Let’s look at how it works and how it can help families across Nigeria.
Overview of Life Insurance
Life insurance is a contract where an insurance company agrees to pay a certain amount of money (called a death benefit) to your family or another chosen person (called a beneficiary) when you die. In return, you pay small amounts regularly (called premiums) while you’re alive.
It’s especially useful for people who have others depending on them—like parents, guardians, business owners, or anyone who supports others financially.
Types of Life Insurance Policies
Term Life Insurance:
This is for a specific period—like 10, 20, or 30 years.
If the person dies within that time, the insurance pays out.
It’s usually cheaper and straightforward.
Whole Life Insurance:
This covers the person for their entire life, not just a set number of years.
It is more expensive but provides lifelong protection and can also help build savings (called cash value).
Endowment Policy:
This pays money to the policyholder if they are still alive at the end of a certain period—or to their family if they die before then.
It combines savings and protection.
Group Life Insurance:
Offered by employers or cooperatives.
It provides life cover for a group of people under one policy, often at a lower cost.
Benefits of Life Insurance
Financial support for family: Helps pay school fees, rent, feeding, and other bills after the policyholder dies.
Debt repayment: Settles unpaid loans or mortgages so that family members don’t inherit debt.
Funeral expenses: Helps the family give a decent burial without stress.
Long-term planning: Encourages saving and proper financial habits.
Peace of mind: Knowing your family will be fine, no matter what.
Examples
Let’s say Mr Okoro, a father of three in Enugu, has a term life insurance policy for ₦10 million. When he sadly passes away in a car accident, his family receives the money. That money helps them pay rent, buy food, and keep the children in school. That’s the value of life insurance.
Or consider Tola, a banker in Lagos, who takes out an endowment policy for 15 years. She survives the term and gets the payout. She uses it to start a small fashion business—life insurance helping while alive!
Summary
Life insurance is about protection and responsibility. Whether it’s term, whole life, or endowment, the goal is to secure your family’s future. It offers peace of mind, financial support, and a way to plan ahead, even when life is uncertain.
Evaluation
What is life insurance, in simple terms?
List and explain two types of life insurance.
Mention two ways life insurance benefits a family after the policyholder’s death.
You’re learning things that can truly change lives. Not just yours—but the lives of people around you. Life insurance is about care, and by understanding it, you’re already showing leadership. Keep it up—you’re doing brilliantly!