Africa is widely known for its rich and diverse cultures which are sweeping across and spreading their uniqueness boldly in the continents of the world. In the richness of African culture are funeral rites usually done to bid farewell to the deceased. For many across different cultures in Africa, funeral practice is a significant rite which brings family, friends and loved ones together for the celebration of the life of the deceased, even while also mourning. Hence, there is a huge financial commitment involved in organising the event.
In the face of increasing economic hardship, these funeral rites, from buying of caskets to preserving the body and the funeral event, could be pocket draining as the cost, in some cases, runs into millions. Consequently, as the pain of loss hits family members, the realization of the financial burden that follows becomes a ground to worry about the funeral expenses.
Easing the financial burden – Role of life insurance
Life-based contracts are based on protection policies designed to provide a benefit, usually a lump-sum payment, in the event of an occurrence, while the investment policies facilitate growth of capital by regular or single premiums.
A life insurance policy is a contract with an insurance company which guarantees payment of a sum of money to named beneficiaries in the event of death of policyholder or an insured person. This form of insurance generally helps to ensure the continuity of life in the event of the death of a breadwinner or any member of the family.
Depending on the amount of coverage, life insurance can protect family members, relations and even the policyholder, in the event of death as it covers expenses such as the funeral event, thereby lifting the burial financial burden off family members. While the policyholder pays a premium as one lump sum or regularly, events such as critical illness can also trigger payment depending on the contract.
The Leadway Family Benefit Plan Plus
The Leadway family benefit plan plus (FBPP), also known as the funeral benefit, is a life insurance product that covers six persons – the policyholder, spouse, parents and parents-in-law. In case of death of any of these people that the policy covers, the company pays an agreed sum benefit to take care of funeral expenses to the extent of agreement between the insurer and insured.
The policy allows payment of benefit on the death of each of the lives insured subject to the policyholder being alive. The sum assured depends on the contractual policy. It ranges from thousands of naira to N1 million and also extends up to the tune of N5 million for the policyholder. That is, in case any of the six persons who the policy cover dies, the company will pay the lump sum for funeral and other expenses in addition to N20,000 to each of the members the policy covers for six months.
At the launch of the product in 2019, Tinashe Muyambo, general manager, Leadway’s life division, pointed out that the Leadway FBPP was in response to meeting the needs clearly expressed by its customers. He added that the Leadway Family Benefit Plan Plus is now designed to provide more than just the funeral benefits upon the death of any of the assured lives.
“Additional benefits have been built into it as [a] compensation package for the surviving and grieving loved family members of the policyholder. The product takes into cognizance the financial survival of the grieving ones.
“The Leadway Family Benefit Plan Plus is a unique and flexible product that allows Nigerians to design a benefit structure that suits their specific needs. In addition to funeral expenses, the Leadway FBPP has other unique benefits that make it relevant for the Nigerian market. In addition to the sum assured, an entertainment expense and additional monthly payment of six months in the form of family income is paid to the beneficiaries in the event of death of the policyholder only.
“There is no doubt that life goes on even after the painful death of our loved ones; this additional payment serves as what we can term a ‘comfort payment’, ensuring that the families can meet ongoing expenses even as they grieve. In essence, when death occurs you have the financial support from this insurance policy to help you protect your wealth,” he further explained.
Finance January 15, 2021
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