Life insurance companies register 2,357 in three months

Life insurance companies registered 2,357 annuity subscribers in three months the National Pension Commission (PenCom), has said.

According to Inspenonline, PenCom stated this in a recent report, stressing that it approved a total of 2,357 applications for retirement under life annuity between July to September 2019. It said the number of annuitants as at July was 68,857 and moved to 71,214 in September.

The pension industry regulator noted that the 2,357 retirees received N3.71 billion as lump sum payment and paid premium of N15.09 billion to insurance companies in exchange for monthly annuity of N159.22 million.

It said this resulted in total lumps sum payment of N94.99 billion, premium of N386.30 billion and monthly annuity receipts of N3.86 billion as at the end of third quarter, 2019.

Determined to harness more fortune from annuity business, the National Insurance Commission (NAICOM) is partnering the College of Insurance and Financial Management (CIFM) to produce 100 actuarial analysts in the next five years, who will help to enhance the growth of insurance sector.

The Commissioner for Insurance, Sunday Thomas, had posited that only a couple of insurance companies have an in-house actuaries, stressing that actuaries are really needed to manage annuity business which was becoming quite significance and almost accounting to 35 to 40 per cent in the industry portfolio with a output of N11trillion.

More so, the Nigerian Insurers Association (NIA) has implored retirees to embrace annuity products offered by insurance companies as a way of staying happy and guaranteeing steady income in retirement.

The association also asked prospective retirees to receive unbiased and independent practical advice and training addressing their emotional pressures, fears, questions, personal financial planning and investment issues necessary for prudent management of their lump sum payment.

Olusola Ilori, who presented a paper on “Importance and necessity of building economic back up,” at a workshop organised by the NIA, with the theme, “Preparing for tomorrow today,” observed that many retirees were ill-equipped to invest their lump sum themselves or even to choose the right financial advisers.

While speaking on what the retirees should do before investing their lump sum, she stated, “Take your time; take a good look at yourself (especially your financial habits and history); get good independent advice from three good financial advisers;
“Have a plan; Diversify-don’t put all your eggs in one basket; become knowledgeable and skilled in whatever thing you decide to do; and start a business on a small scale.”

During the workshop, the association warned the retirees to avoid scams and get rich quick schemes.

“Don’t lend money to people on your lump sum (if lent to your family, consider it a gift); Don’t buy a new car; Don’t marry a new wife; Don’t start building a magnificent house,” she posited.

While explaining the importance and necessity of building economic backups, she stated that there was need to maintain balanced lifestyle out of office.

The NIA said, “There is the need to attain financial independence. There is the need to strive for economic self-sufficiency through other sources of income to compliment pension paid monthly to retirees.

“On no account should one be pressurised to retire without planning and having at least two or three other streams of income to compliment pension.”
This gives financial security which guarantees dignity and comfort in retirement, she stated.

Ilori warned that: “No doubt, retirement is going to come someday and for the discerning, preparations for this critical phase of life cannot start sooner for time is not your greatest friend on this project, in planning for the long years of retirement.

“For those that do start early and prepare adequately, the usual worries about surviving will not be an issue. Unfortunately, in this country people tend to believe that retirement is best dealt with when the time comes and that somehow, there will be the money to fund it even though they may not have any idea where the funds will come from.

“The unfortunate thing about this strategy is that, it becomes too late and the consequences are often dire.”

According to her, most professionals and executive often fall into this trap.