Types of Insurance in Nigeria
Here are the main insurance policies in Nigeria:
1. Personal Insurance
The personal insurance includes insurance for human life which may suffer a loss because of death, accident, and disease.
Therefore, personal insurance is further sub-classified into life insurance, personal accident insurance, and health insurance.
Personal insurance differs from other insurance in the sense that, here, the subject of insurance is the life of a human being.
The insurer will pay the fixed amount of insurance at the time of death or at the expiry of a certain period.
At present, personal insurance enjoys maximum scope because life is the most important property of an individual.
Every person requires insurance.
This insurance protects the family at the premature death or gives an adequate amount at the old age when earning capacities are reduced.
Under personal insurance, a payment is made at the accident.
The insurance is not only a protection but is a sort of investment because a certain sum is returnable to the insured at the death or the expiry of a period.
2. Property Insurance
Under the property insurance property of person/persons is insured against a certain specified risk.
The property of an individual and of the society is insured against loss of fire and marine perils, the crop is insured against an unexpected decline in deduction, unexpected death of the animals engaged in business, break-down of machines and theft of the property and goods.
3. Fire Insurance
Fire insurance covers the risk of fire.
In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well.
With the help of fire insurance, the losses arising due to fire are compensated, and the society is not losing much.
The individual is preferred from such losses and his property or business or industry will remain approximately in the same position in which it was before the loss.
The fire insurance does not protect only losses, but it provides certain consequential losses.
Also, war risk, turmoil, riots, etc. can be insured under this insurance, too.
4. Marine Insurance
Marine insurance provides protection against the loss of marine perils.
The marine perils are; collision with a rock or ship, attacks by enemies, fire, and captured by pirates.
These perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight.
So, marine insurance insures ship, cargo and freight.
5. Liability Insurance
The general insurance also includes liability insurance whereby the insured is liable to pay for the damage of property or to compensate for losing persona; injury or death.
This insurance is seen as fidelity insurance, automobile insurance, and machine insurance, etc.
6. Social Insurance
The social insurance is to protect the weaker sections of the society who cannot pay the premium for adequate insurance.
Pension plans, disability benefits, unemployment benefits, sickness insurance, and industrial insurance are the various forms of social insurance.
7. Guarantee Insurance
The guarantee insurance covers the loss arising because of dishonesty, disappearance, and disloyalty of the employees or the second party.
The party must be a party to the contract.
His failure causes loss to the first party.
For example, in export insurance, the insurer will compensate for the loss at the failure of the importers to pay the amount of debt.