Funeral expense cover in Nigeria: how it works and what it pays

What is funeral expense cover?

It is life insurance that pays a fixed cash sum when a covered person dies, sold to help families meet funeral and burial costs.

In Nigeria it is sold as a family funeral plan that covers the buyer and named relatives, or as a funeral benefit included inside a life plan. Smaller life sums are also sold as micro-insurance. The 2025 Act requires a policy to name the people it benefits, or describe them clearly enough to identify them (section 67).

One Nigerian insurer's family funeral plan, as reported in the Nigerian business press in March 2019, covered the policyholder, their spouse and named parents and parents-in-law. The policyholder and spouse had to be under 65 to join, parents and parents-in-law could join up to age 75, and a parent's sum assured could be up to ₦5 million. The plan also paid a monthly family income for six months after the policyholder's own death.

One Nigerian life insurer's published one-year plan, checked November 2026, pays ₦1 million on death plus a separate ₦100,000 funeral benefit, for a minimum annual premium of ₦10,000, with entry ages of 18 to 64 and no medical examination. It lasts one year, can be renewed, and has no surrender or maturity value.

Who regulates it?

Funeral expense cover is life insurance, so the seller must hold a National Insurance Commission (NAICOM) licence under the Nigerian Insurance Industry Reform Act 2025.

The Act, which commenced on 31 July 2025, counts individual life and group life as classes of life business (section 3). No one may carry on insurance business without a NAICOM licence (section 5), and a new product cannot be sold without NAICOM's prior approval (section 18). Micro-insurance needs its own NAICOM licence (section 200).

NAICOM's 2018 microinsurance guidelines, as summarised by a Lagos law firm in January 2024, cap a micro-insurance sum insured at ₦2,000,000 per person per insurer and allow sales through agents, cooperatives, microfinance institutions and mobile payment systems.

NAICOM's website has a "Verify an Operator" tool for checking a company by name or licence number before paying anything.

How fast must a claim be paid?

Under section 210 of the 2025 Act, an insurer must settle an admitted claim within 60 days of being notified, or pay a ₦500,000 penalty and monthly compound interest on the claim.

If the insurer declines the claim, or says documents are missing, it must say so in writing with its reasons within 60 days of receiving the claim. If an admitted claim stays unpaid, the insured can ask NAICOM to pay it from the statutory deposit the insurer keeps with the Central Bank of Nigeria.

Two other rules matter at the start. There is no cover until the premium is paid in advance (section 60), and the insurer must deliver the policy document on or before the day cover starts; if it has not been delivered before a death, the insurer cannot rely on the policy's terms to refuse the claim (section 17).

NAICOM asks people to complain to the insurer first. It takes complaints through complaints.naicom.gov.ng or by email to complaints@naicom.gov.ng and says it intervenes in genuine claims disputes.

Is there a waiting period?

Both plans checked for this page had one, and the length differed by plan and by who is covered, so it needs checking on each product's terms.

On one Nigerian life insurer's one-year plan, checked November 2026, there is a three-month waiting period for death from natural causes in the first year only. Accidental death during those three months is paid in full, and a renewal with no break has no new waiting period.

On the family funeral plan reported in March 2019, the waiting period was six months for the policyholder and spouse and nine months for parents and parents-in-law.

These are single providers' published figures, not a market rule. The 2025 Act does not set a waiting period for life or funeral cover.

How does it compare with group life, a family fund or crowdfunding?

Funeral cover pays a sum agreed in advance; group life covers only employees; a family fund pays only what was saved; and crowdfunding depends on who gives after the death.

Group life at work is compulsory: section 68 of the 2025 Act and section 4(5) of the Pension Reform Act 2014 require employers to keep group life cover of at least three times each employee's annual total emolument, paid to the employee's named beneficiary. It covers employees, not their parents.

Many families raise money after a death instead. A 2023 study of bereaved people in Ebonyi State, published in OMEGA: Journal of Death and Dying, found online committee of friends groups being used to raise money for burials, and linked this to the rising cost of burials. In November 2024 members of the Nigerian community in the UK launched an online appeal to repatriate a man's body to Nigeria and pay for his funeral.

What should you check before buying funeral cover?

This is general information, not advice on which plan to choose; a qualified adviser can help with that decision.

• Look the insurer up on NAICOM's Verify an Operator tool.
• Confirm the entry age limit for each relative covered.
• Get each waiting period in writing, by relative and cause of death.
• Ask what is paid if a death falls in the waiting period.
• Write down the sum paid for each person covered.
• Ask whether cover ends if the policyholder dies.
• Pay before the cover start date.
• Get the policy document on or before the start date.
• Name beneficiaries exactly as on their ID.
• Ask which documents a death claim needs.
• Agree who in the family keeps the papers and makes the claim.

Questions people ask

Related

• What a funeral costs in Nigeria
• Can you get life cover for a parent in Nigeria from the UK? The options compared
• How does life insurance work in Nigeria?
• Repatriating a body from the UK to Nigeria