- Identify your needs
The first thing you should do when buying individual life insurance is to estimate your needs. If you have children, you will probably want the insurance company to pay for their college. This is possible, but it will drive up the cost of your individual life insurance. You will need to take into account not only daily living expenses, but also any expenses related to vehicles, funerals and hospital bills. If some of the cost can be covered by your current savings, this will drive down the cost of your life insurance premium.
- Decide which kind of life insurance is right for you
There are many different kinds of individual life insurance. Term life lasts for a set number of years, then it expires. Whole life insurance lasts your entire life and you can use it to take out loans, but it’s usually more expensive. Universal life plans are slightly risky because the insurance company invests your money into the stock market, but potential tax benefits make universal life the right choice for some people. Go over the options with your insurance agent and pick the plan that’s right for you.
- Choose an insurance company
The reputation of the life insurance company is the key thing here. If the company has a reputation of refusing claims, it makes more sense to go with a more reliable insurance company for your individual life insurance needs. You may also want to look at the life insurance company’s balance sheet before you sign up. If the company goes bankrupt tomorrow, your policy won’t do you any good. Also, if your insurance agent rushes through the paperwork or leaves you feeling uncomfortable in any way, you should ask to work with a different agent. It’s important that you understand all the fine print before you sign up for individual life insurance.
- Take a medical exam
Individual life insurance plans require policyholders to take a medical exam before signing up. This allows the company to evaluate what kind of risk you are introducing into their system. If you are young with no major health issues, the cost of your life insurance will be low. Remember: if you provide misleading or untruthful information during the medical exam or during the application process, the insurance company may be able to deny future claims– so be honest!
- Know what to do if you have a complaint
Recent reforms have greatly improved the quality of insurance in Nigeria. Nigeria’s National Insurance Commission (NAICOM) is the place to call if you suspect that your insurance company is trying to cheat you out of your hard earned money. If an insurance company violates the rules put forth by NAICOM governing how insurance works in Nigeria, they risk losing their license. Without a license, insurance companies can’t do business.
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