How does life insurance work in Nigeria? NAICOM rules, claims and what to check

Who regulates life insurance in Nigeria?

NAICOM regulates every insurer in Nigeria, and no one may carry on insurance business there without a NAICOM licence (section 5 of the 2025 Act).

The Nigerian Insurance Industry Reform Act 2025 commenced on 31 July 2025 and was published in the Official Gazette on 29 August 2025. It replaced the old Insurance Act and four other insurance laws with one statute. It splits life business into four classes: individual life, group life, annuity and health insurance (section 3). Only a licensed insurer, broker, loss adjuster or appointed agent may use the word "insurer" in its business name (section 4), and a new product needs NAICOM's approval before it is sold (section 18).

A life insurer must hold minimum capital of ₦10 billion, or a higher risk-based figure set by NAICOM (section 15). An existing insurer must also keep a statutory deposit with the Central Bank of Nigeria equal to 10% of that minimum capital (section 16). Insurers had 12 months from commencement to meet the new capital rules. In August 2026 NAICOM confirmed 48 insurance companies and two reinsurers as compliant, with eight more still being verified.

NAICOM's register listed 12 life insurers and 8 composite insurers (which sell both life and general insurance) on pages last updated in August 2025, before that recapitalisation closed. NAICOM's website has a "Verify an Operator" tool to check a company's licence by name or licence number.

How many Nigerians have life insurance?

Very few: NAICOM's Insurance Sector Strengthening Programme, launched in September 2026, estimated that only about 5% of Nigerians had any insurance.

As reported by Arise News, the programme puts insurance penetration at about 0.5% of GDP and aims to raise it to 1.5% by 2028 and 10% by 2031.

NAICOM's market bulletins, as reported by ThisDay in April 2026, put the industry's gross premium at ₦1.558 trillion in 2024, of which life business was ₦498.2 billion (32%). Life insurers paid ₦290.7 billion in claims in 2024. Gross premium for the whole industry reached ₦2.302 trillion in 2025.

What types of life insurance are sold in Nigeria?

The main types are term life, whole life, endowment, group life through an employer, and funeral or family plans, with micro-insurance for smaller sums.

Term life pays a lump sum only if the person dies within the agreed period, and whole of life pays whenever the person dies as long as premiums are kept up, as MoneyHelper, the UK government-backed guidance service, defines them. An endowment combines life cover with saving: one Nigerian life insurer's endowment plans, as described in the Nigerian press in May 2024, ran for 3 to 15 years and paid a lump sum at the end of the term or a death benefit if the person died first.

Group life is cover an employer buys for its staff. Under section 68 of the 2025 Act every employer must keep group life cover of at least three times each employee's annual total emolument, with the employer as trustee, the employees as the lives assured and named beneficiaries, and the insurer must give each member a personal identification number within two weeks. If an employee dies without that cover, the employer must pay three times their total emolument itself.

The Pension Reform Act 2014 sets the same duty: section 4(5) requires every employer to maintain group life cover for each employee of at least three times annual total emolument, and section 4(6) makes an employer that failed to pay the premium arrange payment of death claims itself. The Guardian reported PenCom data showing only six states and the Federal Capital Territory had adopted group life cover for their workers in 2022.

Micro-insurance is a separately licensed business under section 200 of the 2025 Act. NAICOM's 2018 microinsurance guidelines, as summarised by a Lagos law firm in January 2024, cap the sum insured at ₦2,000,000 per person per insurer and allow sales through agents, cooperatives, microfinance institutions and mobile payment systems.

What protections does the 2025 Act give a policyholder?

The Act sets rules on payment, paperwork, honesty and claims that apply to every insurer licensed in Nigeria, whoever buys the cover.

• No cover until the premium is paid in advance (section 60).
• The policy document must be delivered on or before the day cover starts. If it was not delivered before a loss, the insurer cannot rely on the policy's terms to refuse the claim (section 17).
• Information a proposal form does not ask for is treated as not material, and an agent who helps fill in the form is treated as the applicant's agent (section 64).
• A Bank Verification Number (BVN) and National Identification Number (NIN) are part of the information an individual must give the insurer (section 64).
• An insurer can refuse a claim for breach of a term only if the term is material and relevant to the loss, and can repudiate the contract only for fraud or breach of a fundamental term (section 65).
• A policy on another person's life is void without an insurable interest, and that includes a relationship under customary or Islamic law in which one person takes on the maintenance and care of another (section 66).
• The policy must name the person insured and the people it benefits (section 67).
• Inducing someone to buy insurance with a statement known to be misleading is an offence (section 209).
• A fund that receives 0.25% of every insurer's and reinsurer's gross premium income pays admitted claims left unpaid because an insurer became insolvent or lost its licence (section 212).
• Five or more complaints of failing to pay claims promptly, received and verified by NAICOM, are a ground for cancelling an insurer's licence (section 8).

How are life claims paid, and what if one is refused?

Under section 210 of the 2025 Act an admitted claim must be settled within 60 days of notification, and a late insurer pays a ₦500,000 penalty plus monthly compound interest.

If the insurer does not accept the claim, or says documents are missing, it must say so in writing with its reasons within 60 days of receiving the claim. Where a claim stays unpaid, the insured can ask NAICOM to pay it from the insurer's statutory deposit. Disputes on an insurance contract go to the Federal High Court or the insurance tribunal.

NAICOM asks people to use the insurer's own complaints process first and says it intervenes in genuine claims disputes. Complaints can be made through its online portal at complaints.naicom.gov.ng, where a complaint can be tracked, or by email to complaints@naicom.gov.ng, with the policy details, the nature of the complaint and supporting documents.

One Nigerian life insurer's published claims procedure, checked November 2026, asks for a notice of the death, the original policy document, a medical certificate of the cause of death, a death certificate, a burial certificate and the attending doctor's report, plus a police report after an accident, and pays only if premiums are up to date. Buying life cover for a parent from abroad, and the UK route, is covered in the guide to life cover for a parent in Nigeria.

What should you check before buying?

These checks come from the 2025 Act's rules and NAICOM's guidance. This is general information, and a qualified adviser can help with the choice itself.

• Look up the insurer on NAICOM's Verify an Operator tool.
• Confirm whether it is a life or composite insurer.
• Ask for the waiting period in writing, by type of death.
• Ask what is paid if death happens in the waiting period.
• Answer every proposal form question fully and truthfully.
• Have the BVN and NIN ready for the person insured.
• Check the named beneficiaries are spelt as on their ID.
• Pay the premium before cover is meant to start.
• Get the policy document on or before the start date.
• Ask what happens if a payment is missed.
• Ask whether a staff member is already in group life at work.

What should you check before claiming?

A claim moves faster when the insurer has everything it asks for, because the 60-day clock runs from notification.

• Tell the insurer of the death in writing and keep a copy.
• Find the original policy document.
• Get the medical certificate of the cause of death.
• Get the death certificate and burial certificate.
• Ask the attending doctor for a report.
• Get a police report if the death was an accident.
• Check premiums were up to date.
• Note the date the claim was delivered.
• Chase a written answer if none arrives within 60 days.
• Complain to the insurer first, then to NAICOM if needed.

Questions people ask

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