Investment And Financial Security Planning

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

Investment and financial security planning involves building a robust and personalized strategy to manage income, cover expenses, and protect against risks.

The key steps include creating a budget, establishing an emergency fund, reducing high-interest debt from loans, and investing for the future.

There are products approved and regulated by the National Insurance Commission (NAICOM) in the life retail business that can help working-class and self-employed individuals accumulate funds for children’s school fees, business expansion, and retirement within a single product.

A Flexible Endowment Plan is a product that matures in three installment phases. If the policyholder is alive at maturity, they will receive all the proceeds together with the accrued bonuses.

However, in the event of the earlier death of the assured or the owner of the policy, the sum assured, partial maturity benefits, and accrued bonuses will be paid to the nominated beneficiaries to support school fees or ensure business continuity.

[3/9, 17:02] +234 706 371 8460: B) The product combines financial protection against eventuality with investment benefits.

INVESTMENT FEATURES

1) Partial Maturity:

It pays three instalments of 25%, 25%, and 100% of the sum assured, depending on the policy duration selected.

2) Bonus:

It pays a reversionary bonus of 4% of the sum assured per annum, payable at maturity or upon the earlier death of the policyholder.

3) Premium Loan:

It provides a loan at an interest rate of 1% per month after three years, provided that all premiums have been paid up to date.

4) Collateral:

The policy certificate can serve as a supplementary collateral document to secure a loan from any reputable financial institution in Nigeria.

5) Policy Duration:

The available policy durations are:

6 years: (2+2+2).25%, 25%, 100% of the sum assured and 4% bonus per annum.

9 years: (3+3+3): 25%, 25%, 100% of the sum assured plus 4% bonus per annum

12 years (4+4+4):25%, 25%, 100% of the sum assured and 4% bonus per annum.

15 years:

(5+5+5):25%, 25%, 100% of the sum assured, and 4% bonus per annum.

6) Interest Rate:

Reinvestment of any partial maturity benefit attracts a higher interest rate, which could be compound interest depending on the investment value.

Life Protection and Financial Security:

• Waiver of Premium:

The premium will be waived in the event of an accident or illness that has persisted for a minimum of six months. This means that all premiums due within this period will be waived.

• Accidental Death and Dismemberment:

The maximum payout for accidental death and dismemberment is ₦2 million.

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• Permanent Total Disability:

In the event that the policyholder loses either eyes or both hands, this condition is covered under the plan.

• Cover Critical Illness:

These are ailments such as cancer, stroke, and similar serious illnesses that prevent the policyholder from continuing their normal duties. In such cases, the sum assured and accrued bonuses become payable. This financial security plan addresses three key aspects of an individual’s financial security and protection.

The product can be used to accumulate funds for children’s school fees, such as primary, secondary, and higher institution education (25%, 25%, and 100% payouts plus a 4% bonus).

Likewise, for business owners, this plan helps in raising capital for business expansion.

It is also useful as a retirement plan, especially when one becomes older and less able to handle strenuous activities.