Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for money. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium.
The following are some Insurance Products that are useful but not required by law:
1. Fire/Special Perils Insurance – This covers damage or loss to property resulting from about 26 perils including Fire, Flood, Earthquake, Lightning, Explosion, Riot, Storm, Civil Commotion, etc. For properties worth N1million, the premium could range between N2,000 and N4,000 a year depending on location of property and other factors.
2. Burglary or Theft Insurance – This covers damage or loss to property as a result of burglary or theft. For property worth N1 million, the annual premium ranges from N3,000 to N6,000.
3. Accident, Death & Disability Insurance – This covers economic loss to the insured (and relatives) as a result of personal bodily injury, disability or death. For a benefit of N1million, the annual premium ranges from N1,500 to N3,000 depending on occupation.
4. Child’s Education Insurance – This insurance provides for Primary, Secondary and/or Tertiary education of children i.e. school fees, whether the parents are dead or alive. Annual premium ranges from N200,000 to N250,000 depends on the level of education and the amount of school fees to be provided.
5. Household Contents Insurance – This covers loss or damage to clothes, shoes, jewellery. For property worth N1million, the annual premium is between N7,000 and N12,000 depending on location.
6. Goods-In-Transit Insurance – This covers loss or damage to goods being transported from one place to the other either by rail or road. For goods worth N1million, the annual premium ranges from N4,000 to N8,000
7. Life Protection Insurance – This protects Income, Mortgage, etc. For a benefit of N1million, the annual premium ranges from N5,000 to N60,000 depending on age of applicant.
8. Professional Liability/Product Liability Insurance – This type of insurance protects one’s business or product by providing for economic loss in the case of claims by consumers/clients. On an indemnity of N1million, the annual premium is between N3,000 and N6,000 depending on nature of business.