Why Annuities Are Your Guaranteed Peace Of Mind

By Oyekola Taiwo Zacharia, email address: consciousofrisks@yahoo.com; phone no: 07063718460

What is peace of mind? Peace of mind refers to freedom from worry, cognitive calm, and mental clarity, regardless of external situations. It is a state of feeling secure and confident.

Peace of mind is the experience of knowing the truth from the onset. It is a feeling of being safe and protected.

As of 2025, over 70% of Nigerians aged 60 years and above are considered poor or economically vulnerable. Many face significant hardship due to loss of income, high cost of living, and the absence of a steady income stream.

Statistics show that the majority of individuals from the informal sector have no pension coverage.

Old Age and Retirees’ Challenges in Nigeria

i. Unpaid Pensions

This is a serious challenge in Nigeria, especially for retirees in the formal sector. Delays or non-payment of pensions and gratuities are common, leading to financial dependence on others or forcing some retirees to continue working in old age.

ii. Urbanisation and Migration

Children who were trained with hard-earned income or salaries often migrate to cities or abroad in search of work, leaving elderly parents behind without daily care or support.

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iii. Financial Abuse

Due to their vulnerability and dependency, many elderly individuals become victims of neglect, abuse, and exploitation by relatives as a result of financial hardship.

However, growing old in Nigeria is often feared because of these combined challenges, making economic survival and healthcare maintenance a major priority in old age.

Annuity guarantees peace of mind by providing a stable, predictable, and long-term income stream during retirement.

Key Peace of Mind Benefits of Annuities.

1. Lifetime Financial Security

Annuity plans eliminate the fear of running out of money by assuring a consistent cash flow, regardless of how long the annuitant lives.

2. Protection Against Volatility

Globally, this was clearly experienced during the COVID-19 pandemic, when many businesses were shut down and the global economy was severely disrupted.

Unlike market-linked investments, retirees’ annuity monthly payouts were not affected or reduced during this period.

Annuities provide fixed, stable returns and guaranteed income for life, thereby insulating retirees from economic downturns.

3. Security for Loved Ones

An annuity plan often includes a guaranteed period, which ensures that if an annuitant passes away, the remaining balance will be paid to the nominated beneficiaries.

4. Regulatory Backing

Many Nigerians invest their retirement funds in sectors, investments, or businesses that are not regulated by the government, with the assumption that such investments will provide income during old age.

Unfortunately, investments in these sectors are highly risky and do not guarantee lifelong income.

The annuity industry in Nigeria is heavily regulated by the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM).

These regulatory bodies ensure the safety of investments, guarantee reasonable returns, track payment schedules, and ensure that funds are professionally managed.

5. Flexibility

Annuity plans enable policyholders or retirees to secure not only their own future but also ensure that their beneficiaries are financially protected in the event of the annuitant’s death.

In addition, annuity plans offer various options such as spouse benefits, escalation options, and fixed annuities. This flexibility allows investors to tailor their annuity choices to align with their financial risk tolerance, investment goals, and other unforeseen circumstances.