Insurance is a risk-transfer mechanism; in other words, things can go wrong in life and insurance is a way of protecting yourself and/or reducing the effect(s) of negative events i.e. cost of funeral/medical bills, fixing a car or buying a new one altogether, replacing a piece of jewellery which is of sentimental value, replacing a TV or another household good.
In summary, the first recorded forms of insurance can be traced as far back as 400 years ago: back in England in the 1600s a few wealthy men decided that they wanted to explore different ways of increasing their wealth. One of the ways identified was to offer the less-wealth people the opportunity to pay small sums in exchange for a document signed by a wealthy man, guaranteeing protection in the event of a loss or negative event occurring.
In Nigerian culture(s), the idea of insurance or preparing for negative life events often leads to people feeling defensive or rebuking the idea of anything bad happening.
This is understandable as no-one really wants to spend time thinking of bad events which can occur; however, even if you’re the most careful and responsible person in the world, unfortunately there are others that aren’t: consider the reckless, rude drivers you’ve encountered on Nigerian roads, whether as a driver or passenger.
Further examples include travellers experiencing a cancelled flight which results in financial and/or other losses, and items lost/stolen whilst abroad on holiday.
Additionally, a new parent may want to make adequate provisions for their new-born child, but due to financial constraints such plans may be postponed indefinitely, possibly until they’ve forgotten. Rather than waiting a long time to put such plans in place, life insurance for example, is a way in which a person who has a terminal illness or dies, can leave a lump sum for a loved one for a variety of different purposes i.e. school fees, launching a business, wedding costs etc.
Although the list continues to grow, the following insurance products are available for the time being:
Yes, Money Matters provides what is known as ‘Takaful’ insurance for our Muslim customers. We value all our customers and we demonstrate this by continually working hard to satisfy our customers from several different backgrounds.
A customer seeking insurance will pay a figure usually based on their circumstances, which takes into account ‘the sum insured’. An example of this is if your motor vehicle costs N2million to replace which is the full value, or partial cover (further info, see ‘first-loss discount’ below) may be N1.7million of cover (the cost of the insurance will be cheaper with this option), either option is the sum insured.
The cost of insurance is also known as a ‘premium’ and is usually payable upfront.
An excess is a contribution you are required to pay towards a claim you make on your car insurance policy.
Some insurance policies come with a “first loss” option (or "first loss cover" ), which is also commonly referred to as a ‘deductible’. In this arrangement, the policyholder and the insurer agree to insurance coverage which is lower than the actual value of the insured item.
Benefits for this partial coverage are normally much lower than the policy’s full sum insured. In the event of a loss, the insurance company pays out benefits in keeping with the pre-agreed maximum sum.
An example of a first-loss household insurance policy is: Your household’s property is valued at N10million. Your first-loss policy has a maximum benefit of N8million, or 80 percent of your property’s value. In this case, you would be under-insured and in the event of a total loss, your policy would only cover 80 percent of losses.
What is the difference between an excess and a first-loss discount/deductible?
An excess insurance policy provides additional coverage and/or higher limits above and beyond those of the underlying primary policy. A deductible is the amount an insured must pay out of pocket before an insurance company will issue payment for the remainder of the claim
A Long-Term Agreement otherwise known as an ‘LTA’, is an agreement that gives an insurance policyholder a discount on their premium, in return for committing to renewing the insurance for a fixed number of years.
LTAs are usually set at three or five years (unless stated otherwise). The longer the term, the greater the discount the insurer may choose to offer.
The insured customer will make their claim using the contact details provided to them when the policy was first purchased. As long as the customer is truthful, doesn’t engage in fraudulent claims and fulfils the terms of the policy, there’s every reason to believe the claim will be successful.
In the event of making a successful claim, the claimant will usually pay the ‘excess’ (further info above). This will be a pre-determined sum and is a feature of many insurance policies. An example of this is a claimant making a motor insurance claim for N3million which is the cost of replacing a damaged vehicle. The insurance policy may stipulate that the excess payable is the 10%, which would result in a pay-out of N2.7million.
Please visit the insurance section of the site, select the insurance policy (and options) you’re interested in, provide the necessary details where prompted and simply choose the best deal!
Money Matters will continually work hard to provide a reliable service for insurance customers, including providing services at the cheapest possible prices, customer support and vital information to ensure you are satisfied!
Money Matters is a “price comparison” site which is newly launched and offers a range of different services one of which is insurance.