Foundational Questions - Insurance 101 for Nigerians

This section is designed to provide the fundamental "why" behind insurance, addressing the most basic user questions and challenging common misconceptions. It must frame insurance not as a luxury or an unnecessary expense, but as a critical financial tool for everyone.

What is insurance, and why do I need it?

Answer: Insurance is a smart financial safety net. You pay a small, regular amount called a premium to a licensed insurance company like AIICO, and in return, the company agrees to protect you against major and unexpected financial losses. This protection helps you stay financially stable when unforeseen events occur, such as accidents, illness, or damage to your property. By pooling risks with many other policyholders, insurance ensures that support is available when you need it most, helping you avoid sudden financial hardship.

I'm a careful person; isn't buying insurance a waste of my money?

Answer: That is a very common question, and it’s actually one of the biggest myths about insurance. Being careful is great, but even the most careful people can’t control everything. Life still happens. Many people feel premiums are “wasted” if they never make a claim, but think of it this way: insurance is not about expecting something bad to happen, it is about being prepared just in case it does. One unexpected event can be extremely costly. An emergency surgery, for example, can cost far more than many years of health insurance premiums. A single car accident could result in medical bills running into millions of naira. Insurance is your financial safety net. You may never need to use it and that is a good thing, but if the unexpected happens, it protects your hard-earned savings from being wiped out in one moment. That peace of mind is what you are really paying for.

Is insurance too complicated and expensive for the average Nigerian?

Answer: Not at all. This is another common misconception. AIICO offers a wide range of products tailored for Nigerian customers, with options that are both affordable and accessible. We believe that insurance is for everyone who wants good financial protection. Many of our plans have flexible payment options, and some are even tax-exempt. Our mission is to make insurance easy to understand, and we have dedicated teams to help you find a plan that fits your budget and specific needs.  

How do insurance companies make money?

Answer: Insurance companies make money through two primary methods: by investing the premiums they collect and through underwriting profits. Underwriting is the process of assessing risk and setting premiums. The goal is to collect enough premiums to cover all claims and administrative costs. The remaining money, which is held in reserves, is invested in a wide range of assets, and the returns from these investments contribute to the company's profit and financial stability. This robust process ensures AIICO has the funds available to pay claims promptly when you need them.  

What is the National Insurance Commission (NAICOM), and why is it important?

Answer: The National Insurance Commission (NAICOM) is the primary regulatory body for Nigeria’s insurance industry. Its core responsibility is to supervise and regulate insurance companies to ensure they comply with insurance laws and, most importantly, protect policyholders' interests. NAICOM is a crucial part of the ecosystem that ensures you are doing business with a legitimate and financially stable company. A helpful tip is to use the “Verify an Operator” tool on the NAICOM website to confirm that your insurance provider is licensed and regulated.

Are all insurance policies the same?

Answer: No, this is a dangerous misconception that can lead to being underinsured. While some policies may seem similar on the surface, they differ significantly in their coverage, exclusions, and limits. For example, in auto insurance, a basic Third-Party plan offers minimal legal coverage, while a Comprehensive plan provides a much broader financial shield. A key is to look beyond just the price and understand exactly what is and isn't covered in your policy. At AIICO, we offer products tailored to Nigerian customers with great coverage.

What is a premium, and how is it determined?

Answer: A premium is the regular payment you make to keep your insurance coverage active. It’s essentially your subscription fee for financial protection. Your premium is calculated based on various factors that determine your risk profile. For example, with auto insurance, it depends on the type of car, your driving history, and the level of coverage you choose. For life insurance, it considers your age, health, and lifestyle. AIICO's underwriters carefully assess these factors to determine a fair and accurate premium for your policy.

Can I change my insurance policy after I've bought it?

Answer: Depending on the type of policy, you may have the option to make changes. For many life and general insurance plans, you can adjust coverage amounts, update personal information, or change beneficiaries by contacting us. It’s also important to regularly review your policy to ensure your coverage is still adequate as your circumstances change and your assets grow.

What is a "Deductible" and how does it work?

Answer: The deductible is the out-of-pocket amount you must pay toward a claim before the insurer covers the rest. For instance, if you have an accident with  

N50,000 in damages and your deductible is N20,000, you pay the N20,000, and AIICO pays the remaining N30,000. A higher deductible usually means a lower premium, but it's important to choose an amount you can comfortably afford if you need to make a claim.  

What is a "Rider"?

Answer: A rider is an amendment or an add-on that modifies the terms or coverage of your original policy. Riders are a great way to customize your plan to fit your specific needs, often for an additional cost. For example, a life insurance policy might have an "Accidental Death Rider" that pays an additional sum if you die in an accident, or a health plan might have a rider for maternity coverage. Riders allow you to get the extra protection you need without buying a whole new policy

How do I confirm my motor insurance is genuine?

Answer: Verify on the NIID Motor Insurance Database

How soon do I get my insurance certificate?

Answer: Immediately or within 24 hours after payment.

Is my policy valid nationwide?

Answer: Yes, motor insurance is valid across Nigeria and also extends to cover ECOWAS states.  

Question: What exactly is Third-Party Motor Insurance and Is Third-Party Insurance compulsory in Nigeria?

Answer: In Nigeria, a law mandates that every vehicle must have a minimum level of insurance coverage, which plays a crucial role in ensuring the safety and financial security of drivers on the road. This regulation is vital as it provides a safety net for unexpected incidents that may occur while driving.

Consider a scenario where you accidentally injure someone in an accident or damage another driver's car, or even cause harm to someone’s property. In such cases, your insurance provider—in this case AIICO steps in to provide assistance. They handle the financial implications of the situation by covering the costs associated with medical bills for the injured party, as well as expenses related to car repairs or property damage.

Having this level of coverage not only protects you from substantial out-of-pocket expenditures but also grants you peace of mind. You can drive with confidence, knowing that you are prepared to face unforeseen circumstances without the overwhelming fear of bearing those hefty expenses alone. This insurance requirement ultimately promotes responsible driving and contributes to a safer environment for all road users.

What risks does it not cover?

Answer: This policy is all about protecting others when you're on the road. It doesn't cover things like fixing your own vehicle, dealing with the theft of your car, or any injuries you might face as the driver. Instead, its main focus is to make sure that if something goes wrong while you're driving, the people affected are taken care of.

How much does third-party auto insurance cost?

Answer: A flat rate of N15,000

Is the premium the same for all types of vehicles??

Answer: The premium is the same for both sedan/saloon vehicles and SUVs (Private Motor). However, other types of vehicles, such as buses, motorcycles, tricycles, vans, tractors, and more, have different premiums as stipulated by NAICOM.

Can I upgrade later to a bigger plan?

Answer: Absolutely! You can switch to Enhanced Third-Party or Comprehensive coverage whenever you need to. We'll adjust your premium accordingly, so you always have the right level of protection to suit your situation. We're here to make sure you’re covered whenever it matters most!  

How do I make a Third-Party claim?

Answer: If you find yourself in an accident, it’s important to take the right steps to ensure everything is handled properly. First, make sure to report the incident as soon as possible. This can involve notifying your insurance company and, if necessary, local authorities.

Next, be prepared to fill out a claim form. This document will require essential details about the accident, including the date, time, and location, as well as a description of what happened. Ensure you include any relevant information about the parties involved.

Taking photos of the accident scene can be incredibly helpful. Capture images of the vehicles, any damages, and the surrounding area. If the police are called to the scene, obtaining a police report can provide official documentation of the incident, which is often crucial for processing your claim.

Additionally, you’ll need to share information about the other party involved in the accident. This includes their contact information and insurance details, if applicable.

Once you’ve gathered all this information and submitted your claim, AIICO will begin processing it according to your policy. They will evaluate the details provided and work towards settling the matter fairly and appropriately.

Remember, taking these steps can make a significant difference in how efficiently your claim is handled and resolved. 

Will Third-Party cover me if I borrow a friend’s car?

Answer: No,the policy is tied to the insured vehicle, not just the driver.

How can I verify that my auto insurance policy is genuine?

Answer: You can verify your car insurance certificate in Nigeria by dialing the USSD code \*565\*11# or by visiting the askniid.org website. For the USSD method, dial the code, then input your vehicle's registration number when prompted. To use the website, go to askniid.org, select the "Check Policy" option, then choose "Vehicle Policy" and enter either your plate number or insurance policy number to check its authenticity.

Why should I still consider Third-Party if it doesn’t protect my car?

Answer: Because it’s mandatory, affordable, and shields you from potentially huge liabilities to other people.

If there’s an accident but I’m not at fault will my insurance still cover the third party?

Answer: Yes, we will pay claims if there was a collision with your vehicle 

Can I still buy this plan if my car is used for business purposes and is the premium the same as personal-use cars?

Answer: Yes, you can, but we recommend opting for comprehensive insurance as it provides complete protection for your vehicle and covers third-party damages. PLEASE NOTE that the premium for commercial vehicles is different.

Question: What makes Enhanced Third-Party different?

Answer: Enhanced Third-Party Motor Insurance (ETPMI) is designed to provide additional financial protection beyond standard Third-Party coverage. While traditional Third-Party insurance focuses on liabilities to others, AIICO's Enhanced Third-Party Motor Insuranceincludes a safety net that offers limited reimbursement for your own vehicle’s repair costs after an accident.

Question: What Type of “Limited Coverage” Does ETPMI Provide?

Answer: With ETPMI, policyholders benefit from a fixed payout amount (clearly outlined in your policy) designated for repairs on your own car, in addition to the standard Third-Party liability benefits. This feature allows you to address minor repair expenses without the need to invest in a full Comprehensive insurance policy.

Question: What does Enhanced Third Pary Covers?

Answer:

Third-Party Coverage

Property Damage: Covers damage to third-party vehicles or property up to ₦3 million. Bodily Injury & Death: Unlimited coverage for injuries or death caused to others.

Protection for You

Own Damage Coverage: Get up to ₦1,000,000 (Diamond), ₦750,000 (Gold), or ₦500,000 (Silver) for repairs to your car after an accident. Windshield Damage: Covered under own damage.

Emergency Medical Expenses

Combined limit of ₦100,000 (Diamond), ₦75,000 (Gold), or ₦50,000 (Silver) for you, your driver, or passengers. Legal Fees & Expenses Up to ₦100,000 (Diamond), ₦75,000 (Gold), or ₦50,000 (Silver) for legal costs arising from an incident.

Towing Services

Get your car towed for free within the city or intercity, depending on your plan.

Fire, Theft, and Burglary Protection

Coverage for fire, external explosion, self-ignition, lightning, and theft up to the limit of your plan.

Question: Who is the Enhanced Third-Party Insurance Plan Best Suited For?

Answer: This insurance option is particularly well-suited for drivers who prioritize meeting legal requirements while also ensuring the safety and well-being of others on the road. It serves as an excellent choice for individuals who may find themselves in minor accidents, allowing them to receive essential assistance with repair costs without incurring the higher premiums typically associated with Comprehensive coverage.

For instance, consider a driver named Sarah who occasionally commutes to work. She wants to remain legally compliant and protect herself against liability, but she does not frequently face major accidents. One day, while navigating through a crowded parking lot, she accidentally scrapes the side of another car. Thanks to her insurance policy, which includes coverage for minor accidents, Sarah can comfortably file a claim. This coverage helps her handle repair costs for both her vehicle and the other car involved, alleviating the financial burden while keeping her insurance premiums manageable. This approach allows her to maintain peace of mind on the road, secure in the knowledge that she is protected without overextending her budget with comprehensive insurance.

What does Comprehensive motor insurance cover?

Answer: It covers damage to your car, third-party liabilities, theft, fire, and accidental damage.

Does insurance cover riots or civil commotion?

Answer: Usually yes, under Comprehensive Insurance.

How much does motor insurance cost in Nigeria?

Answer: Premium depends on the vehicle value, type, and coverage selected. But a minimum of 5% of the value of vehicle.  

Can I pay my motor insurance Installmentally?

Answer: Yes, we offer quarterly, bi annual and yearly payments.

What is vehicle valuation?

Answer: It is the assessed current market value used to determine premium  

How do I make a motor insurance claim?

Answer: Report the incident, submit required documents, and complete a claim form.

How long does it take to process a claim?

Answer: Typically between 4–14 working days, depending on documentation.

What documents are needed for a claim?

Answer: Claims form, extimate of repairs, pictures of accidented parts, police report in case of death.  

Will my claim be paid in cash or repair?

Answer: Usually cash settlement may apply.

What is AIICO Travel Insurance?

Answer: It is an insurance policy that provides financial protection against travel-related risks such as medical emergencies, trip cancellation, loss of baggage, and travel delays while abroad.

Who can buy AIICO Travel Insurance?

Answer: Any Nigerian resident traveling outside Nigeria for business, leisure, education, or religious purposes.

Is AIICO Travel Insurance accepted for visa applications?

Answer: Yes. It meets visa insurance requirements, including Schengen visa standards.  

What countries does the policy cover?

Answer: The policy covers travel to Europe (Schengen), Asia, America, the Middle East, Africa, and other approved destinations worldwide.

Does the policy cover medical expenses abroad?

Answer: Yes. It covers emergency medical treatment and hospitalization during your trip.

Can students traveling abroad purchase this policy?

Answer: Yes. AIICO offers travel insurance plans suitable for students studying abroad.

Does the policy cover pre-existing medical conditions?

Answer: Pre-existing conditions are generally excluded unless specifically declared and accepted.  

Is flight delay covered?

Answer: Yes. Compensation is provided if your flight is delayed beyond the stated waiting period.

How do I make a claim?

Answer: Claims can be made by notifying AIICO or its assistance partner (AXA MAROC) and submitting required documents.  

Is emergency assistance available 24/7?

Answer: Yes. The policy includes 24-hour international emergency assistance.

How much does AIICO Travel Insurance cost?

Answer: The cost depends on destination, duration, age, and selected coverage plan. Click https://ebusiness.aiicoplc.com/ to explore this plan.

What is Life Insurance and why is it important?

Answer: Life insurance is a contract where you pay regular premiums to an insurer like AIICO, and in return, a benefit is paid to your beneficiaries upon death or at maturity. It provides financial protection for your family, ensures continuity of income, settles debts, and helps meet long-term goals such as education and retirement.

Who should consider buying Life Insurance?

Answer: Anyone with financial dependants should consider life insurance. This includes parents, breadwinners, business owners, and individuals planning for retirement or education funding. It is also useful for people who want disciplined savings with protection.

Is Life Insurance only useful when death occurs?

Answer: No. Many life insurance products, such as Endowment, Education, and Annuity plans, provide benefits during the policyholder’s lifetime, including savings, investment returns, guaranteed income, and education funding.  

What is underwriting in Life Insurance?

Answer: Underwriting is the process of assessing the risk presented by a policy applicant. It helps determine eligibility, premium rates, and coverage terms based on factors such as age, occupation, health status, and lifestyle.

Why do insurers ask personal and health-related questions?

Answer: These questions help underwriters properly assess risk and ensure fair pricing. Accurate disclosure protects both the policyholder and the insurer and ensures claims will be paid without complications.

Do all Life Insurance products require medical examinations?

Answer: No. Some products, such as Deferred Annuity and certain Endowment plans, do not require medical examinations. Others, especially high-sum assured or risk-focused policies, may require medical underwriting.

What happens if I do not disclose important information?

Answer: Non-disclosure or misrepresentation can lead to policy cancellation or denial of claims. It is always best to provide full and honest information at the proposal stage.  

What is an Annuity Plan?

Answer: An Annuity Plan provides guaranteed regular income during retirement. It protects against the risk of outliving your savings and may also include death benefits and spousal income options.

What is the difference between Deferred and Immediate Annuity?

Answer: A Deferred Annuity allows you to save now and receive income at retirement, while an Immediate Annuity provides income almost immediately after paying a lump sum premium.

What happens if the annuitant dies?

Answer: For Deferred Annuity, premiums paid are refunded with interest if death occurs before annuity commencement. After commencement, a lump sum of five times the annual annuity plus any guaranteed balance is paid.

Are annuity contributions tax-relieved?

Answer: Yes. Contributions to annuity plans enjoy tax relief, helping policyholders reduce their tax liability while planning for retirement.  

What is Level Term Assurance?

Answer: Level Term Assurance provides a fixed lump sum payment if the insured dies within the policy term. It is designed to protect families, businesses, and loan obligations against financial loss.

Does this policy pay anything if I survive the term?

Answer: No. Level Term Assurance is a pure risk cover. No benefit is payable if the life assured survives the policy term.

Is suicide covered under this policy?

Answer: Suicide is covered only after the first two (2) years of the policy, in line with policy conditions.

What is the AIICO Flexible Endowment Plan (FEP)?

Answer: The FEP is a savings and protection plan that provides guaranteed payouts at intervals during the policy term and full payment at maturity, with life cover throughout the policy duration.

When are benefits paid under the FEP?

Answer: 25% of the face amount is paid at one-third and two-thirds of the policy term, while 100% of the face amount is paid at maturity or upon death.

Can I access loans under this policy?

Answer: Yes. After three years, up to 70% of the policy’s cash value is available as a loan, subject to policy terms.

What is the Education Endowment Plan?

Answer: This plan helps parents save towards their child’s education while providing protection in case of death or disability of the policyholder.

What happens if the policyholder dies?

Answer: All future premiums are waived. The beneficiary receives monthly maintenance income, and 100% of the sum assured is paid at maturity.

What if the child dies during the policy term?

Answer: The policyholder may replace the child. If no replacement is available, the policy is treated as a surrender and premiums paid are refunded.

What is the AIICO School Fees Plan?

Answer: It is an education policy designed to fund a child’s primary, secondary, or university education while providing financial support if the parent/guardian dies or becomes disabled.

What happens if the policyholder dies or becomes disabled?

Answer: Premiums stop, maintenance income of 12% of the annual benefit is paid to the surviving parent, and school fees funding continues until maturity.

Can premiums be reinstated if missed?

Answer: Yes. Policies can be reinstated subject to payment of outstanding premiums and penalties, except within restricted periods close to maturity.

Can I change beneficiaries on my Life Insurance policy?

Answer: Yes. Beneficiaries can be changed at any time by submitting a formal request, provided the policy is active.

How are Life Insurance claims processed?

Answer: Claims are processed upon submission of required documents such as claim forms, death certificates, and medical reports. AIICO ensures prompt and transparent settlement once documentation is complete.

Tell me more about AIICO

Answer: AIICO Insurance is a financial services group with market-leading positions in Insurance. AIICO commenced operations in Nigeria in 1963 and has since maintained the market leader in Retail Life insurance and retirement services and also a market leader in Non-Life insurance in Nigeria. AIICO understands the importance of choosing a financially strong company. We are an organization built for the long term and are committed to giving you that strength. For 60 years+, our clients have trusted us to protect them. AIICO Have been committed to Building value for its shareholders, providing quality products and services to its customers; and offering a rewarding work environment for its employees.

Is there an online portal for managing my policy?

Answer: Yes, we have a self-service online portal for managing your policy. You can profile yourself in less than 5 minutes by clicking here and using the sign-up option.

I want to make changes to my policy?

Answer: You can make changes to your policy by contacting us on 07000AIICONTACT (07002442668228) or This email address is being protected from spambots. You need JavaScript enabled to view it.. Also, you may send us a written letter to notify us at any of our locations closest to you, detailing your request

How can I make payment on my life insurance policy?

Answer:

Option 1:

Go to https://ebusiness.aiicoplc.com and click Life Renewal/Loan Payment, and proceed to make payment via Interswitch using your ATM card. Alternatively, you may use Paystack, which offers the following payment options;

• ATM card
• Transfer to Paystack-Titan Bank using the virtual account generated
• Your Bank web portal
• Using the GTB USSD *737* virtual account
• Opay

Option 2:

Quick teller Click here: https://quickteller.com/aiicoinsurance

Option 3:

Using GTB or First Bank Mobile app; Click payments, Search for Insurance, Select AIICO, enter your policy number and payment amount. After payment a receipt will be generated instantly and sent to your email.

Option 4:

Save this WhatsApp number +234 703 046 5562 as AIICO Ella on your phone contacts and interact using the prompts. Click Renew Policy, life renewal then select the Renewal Payment option.

How do I set up Direct Debit (recurring payment) on my Policy?

Answer:

Please fund your account ahead of the mandated date.

How long does it take to process a claim?

Answer: All claims’ requests are handled promptly, and payment made within 5 working days upon receipt of all documents. However, our team will keep you informed throughout the process.

What are the products available?

Answer: AIICO Insurance Plc provides varied insurance products for both Life and Non-Life tailor-made to suit the needs of individuals and corporate bodies

Our life products are grouped into Annuity Plan, Endowment Plan (which are Flexible Endowment Plan and Children Education Plan), Investment Plan (which are Corporate Savings Plan, School Fee Plan, New Income Investment Plan and Education Assurance Plan), Pure Risk Plan (which are Moneywise Term Assurance, Level Term Assurance, Life Celebration Plan and Criticare. General business plan (which are Group Life Insurance and Group Education Plan.

Our Non-life products includes auto insurance, marine insurance, personal accident, home insurance, travel insurance plan, manufacturing insurance, oil and gas, agric insurance and general business plan (which are fire and special peril, consequential loss, employer’s liability, goods-in transit etc).

Who can pick up your insurance plan?

Answer: Every income earner can purchase our insurance plan.

Can I pick up more than one product at a time?

Answer: Yes, different products can be purchased at a time. 

Who can be registered as my beneficiary?

Answer: You are at liberty to register anyone as your beneficiary especially those you deem fit might who might not be financially capable if the insured event happens.

How do I pick up an AIICO insurance plan?

Answer: Our insurance plan can be purchased through our website, via email, through our financial advisors or any of our branches.

How can I contact you?

Answer: We can be reached either by filling the contact form on our website www.aiicoplc.com, via email on This email address is being protected from spambots. You need JavaScript enabled to view it., via calls using our contact centre number 0700 AIIContact (0700 2442 6682 28) or visit any of our branches in Lagos or outside Lagos. 

Can my policy be swapped?

Answer: Policy cannot be swapped except on the condition of Surrender, of which charges will apply and the remaining balance transferred to the new policy.

How do I apply for my funds at maturity?

Answer: You can apply for your maturity funds by sending a request either through our email or via any of our contact channels. The necessary documents will be given for you to fill and revert for processing.

How do I file for a death claim?

Answer:

You can file for a death claim via our email at This email address is being protected from spambots. You need JavaScript enabled to view it. or any of our contact channels by providing the following documents:

What should I do if I need to change my beneficiary?

Answer: You will be required to send a signed written letter informing us of your intention to change your beneficiary and fill the change of beneficiary form to enable us effect change accordingly.

Can I opt out of the plan at any time?

Answer: There is a 30- day grace period on our policies where you can opt out and get your full premium paid. However, if you decide to surrender after this period, surrender charges as applicable to the exact policy will apply.

When do I start enjoying cover?

Answer: You start enjoying cover from the effective date of the policy. However, there is a 6 months waiting period on some policies before claim can be paid. The waiting period will be subject to the terms of the policy. If eventuality happens when the policy is still on the proposal stage, the premium paid will be refunded.

Is there a limit to the number of people I can register as my beneficiary?

Answer: No, there is no limit.

What is the difference between the Investment and the Endowment Plans?

Answer: Investment refers to the allocation of funds with the aim of generating returns or income while endowment combines protection and investment. It refers to a life insurance policy where the policy holder pays premiums over a specified period and upon the death of the policy holder, a lump sum amount is paid to the beneficiary or paid to the insured at the maturity date, if no eventuality happens. While both involve allocating funds, investment focuses on generating returns.

I can't remember the policy number

Answer: Kindly send a mail to us at This email address is being protected from spambots. You need JavaScript enabled to view it. with your name, date of birth and beneficiary details to enable us to verify.