diagnosis of a terminal illness
diagnosis of a critical illness
disability due to ill health
There are four basic life assurance contracts.
1. Term Assurance
In this type of contract, a fixed term of years is
decided upon at the ontset. The benefit i.e. sum assured
is only payable if death should occur during the chosen
term. Nothing is payable if the life assured survives to
the end of the term. The premiums for this contract are
low because the majority of term assurance contracts do
not result in payment.
Term Assurance policies are used to cover period in a
person’s life when the consequences of an early death
would be particularly serves, for example:
• When a young family is growing up
• When a house mortgage or other loan is being repaid.
• When an income for dependents may be required.
These requirements give rise to variations in the
basics for assurance contract; for example, when a
loan or mortgage is being repaid a “decreasing term
assurance” may be used. In decreasing term
assurance, the sum assured payable decreases each
year so that it is equal to the amount of loan
outstanding at any given time during the term.
Also, a decreasing term assurance may be used
when an income is required on the death of a
Meaning of Whole Life Assurance
Types of Whole Life Assurance
This type of policy guarantees the assured the
sum only after the death of the life assured.
The premium are always expensive due to the
fact that a claim is certain
Types of Whole Life Assurance
Six types of whole life insurance policies are explain below;
1. Participating Policy
In a participating policy (also known as a with-
profits policy), the insurance company shares the
excess profits called dividends or refunds or bonus
with the policyholder.
In this policy, the greater the success of the
company's performance, the greater the dividend.
2. Non-Participating Policy
Under this policy, all values related to the policy (death
benefits, cash surrender values, premiums) are usually
determined at policy issue, for the life of the contract, and
usually cannot be altered after issue.
This means that the insurance company assumes all risk of
future performance versus the actuaries' estimates. If future
claims are underestimated, the insurance company makes up
the difference. On the other hand, if the actuaries' estimates on
future death claims are high, the insurance company will retain
3. Indeterminate Premium
It is similar to the non-participating policy, except
that the premium may vary year to year.
However, the premium will never exceed the
maximum premium guaranteed in the policy
4. Limited Pay
It is similar to a participating policy, but instead of
paying annual premiums for life, they are only due
for a certain number of years, such as 20.
The policy may also be set up to be fully paid up at a
certain age, such as 65 or 80. The policy itself
continues for the life of the insured.
5. Single Premium
It is a form of limited pay, where the pay period is a
single large payment up front.
These policies typically have fees during early policy
years should the policyholder cash it in.
6. Interest Sensitive
This type is fairly new, and is also known as either excess
interest or current assumption whole life. The policies are a
mixture of traditional whole life and universal life. Instead of
using dividends to augment guaranteed cash value
accumulation, the interest on the policy's cash value varies
with current market conditions. Like whole life, death benefit
remains constant for life. Like universal life, the premium
payment might vary, but not above the maximum premium
guaranteed within the policy.
In a whole life assurance contract, there is no fixed term.
Premiums are paid up to the date of death, when the sum
assured becomes payable.
The premiums charged are higher than for term assurance
because claims would definitely be made on the policy.
Whole life assurance is used as a means of obtaining relatively
inexpensive cover and to cover the event of early death over
Meaning of Endowment Policy
Types of Endowment Policy
An endowment policy is a life assurance contract designed to
pay a lump sum after a specified term (on its “maturity”) or on
earlier death. The assured takes a policy for a definite period.
Typical maturities are ten, fifteen or twenty years up to a
certain age limit. Some policies also pay out in the case of
Endowment assurance has a fixed term of years decided upon
at the ontset. The benefit under the policy is payable either on
death during the chosen term or at the end of the term if the
life assured survives until then.
Endowments can be cashed in early (or “surrendered”) and the
holder then receives the surrender value which is determined
by the insurance company depending on how long the policy
has been running and how much has been paid in to it.
i. Traditional With Profits Endowments
There is an amount guaranteed to be paid out called the sum
assured and this can be increased on the basis of investment
performance through the addition of periodic bonuses. Regular
bonuses called reversionary bonuses are guaranteed at
maturity and a further non-guaranteed bonus may be paid at
the end known as a terminal bonus.
ii. Full Endowments
A full endowment is a with-profits endowment where the basic
sum assured is equal to the death benefit at start of policy and,
assuming growth the final payout would be much higher than
the sum assured
iii Unit-linked Endowment
Unit-linked endowments are investments where the premium is
invested in units of a unitized insurance fund. Units are enchased to
cover the cost of the life assurance.
Policyholders can often choose which funds their premiums are
invested in and in what proportion. Unit prices are published on a
regular basis and the encashment value of the policy is the current
value of the units. This is the simplest definition.
iv Low Cost Endowment (LCE)
A low cost endowment is a combination of an endowment where an
estimated future growth rate will meet a target amount and a
decreasing life insurance element to ensure that the target amount
will be paid out as a minimum if death occurs (or a critical illness is
diagnosed if included). The main purpose of a low cost endowment
has been for endowment mortgages to pay off interest only mortgage
at maturity or earlier death in favour of full endowment with the
required premium would be much higher
Lump sum on retirement: Life assurance policy is a means of saving for
the future because it provides lump sum of money on retirement.
Provides for Permanent Disability: The endowment policy makes
provision for permanent disability
Serves as Collateral Security: Life assurance policy can be used as
collateral for obtaining a bank loan needed to set up a business enterprise
or expand an existing one.
Source of Loan Repayment: Life assurance provides loan repayment in
the event of death
Provision for Old age: Life assurance can be used as a means of providing
for old age by making saving for the future.
Provision for Dependant: It is useful way of providing for the welfare of
the assured’s dependants after his death. For instance, endowment policies
can be taken to provide for children’s education. The children concerned
will receive the sum assured on their behalf upon attaining a certain age.
Means of Raising Capital: Life assurance policy can be used to raise
capital to be used for a specific project in the future.
Provision for Burial Expenses: Whole life assurance can be used to
provide for funeral and death expenses since the money can only be
claimed after the death of the policyholder i.e the sun assured is payable
only at death.
Provision of capital: It provides for the repayment of capital on a partner’s
Meaning of Accident Insurance.
Branches of Accident insurance.
This type of insurance provides for compensation against
injuries which someone may sustain. Policies can
be arranged to cover personal accidents for a
particular journey, especially one involving in
Personal Accident Insurance: This branch of accident
insurance provides for the payment of lump sum to the
insured should he suffer loss of life, loss of eye sight etc
as a result of accident.
Property Insurance: It may be taken out against all
kinds of accident to property, especially burglary.
Fidelity Guarantee: This covers the risk which an
employer may suffer as a result of dishonesty of an
employee. Some employees like
Cashier, Bursars, Accountants, Sales persons and others
who handle large sum of money on behalf of their
employers may embezzle the money entrusted to their
Meaning of contract
Meaning of insurance contract
Nature of Insurance contract
An insurance contract is an agreement between an insurance
company and the individual effecting the insurance cover.
Such an individual is referred to as the insured.
It is a “legally binding agreement” made between two or more
parties, by which rights are acquired by one or more to act or
forbearances on the part of the other parties.
For insurance contract to be valid, it must satisfy the
under listed requirements.
1. Offer and Acceptance
An offer is a communication of the contract terms by one party
to another. Acceptance refers to the letter’s agreement of those
In motor insurance contract, the offer is made by the proposer
when he completes a proposal form. The insurer accepts by
issuing a cover note.
Consideration refers to the gain or benefit received by one
party in return for a promise or the performance of an act of
another. In an insurance contract, the consideration consists on
the one hand of the insurer’s promises to compensate the
insurer for a loss, and on the other hand of the premium
payment by the insured, to the insurer.
3. Legal Capacity of Parties
The two parties to the contract must have legal capacity to enter into
such for it to be valid. Certain categories of persons are not qualified
to enter into insurance contracts.
These include persons of unsound mind and minors or infants
4. Consensus and Ad-idem.
The two parties must observe the principle of Utmost Good Faith. i e
the two contracting parties must be of the same mind as to the
contract before an agreement could be valid. The insured must
disclose all the material facts to the risk and the insurer must observe
the same good faith by disclosing all the terms and all the conditions
of the contract.
5. Legality of Object
Subject of the contract must be legal for it to be valid. Contracts must
not be illegal, that is, they are invalid if they are forbidden by statute
or are against what is called public policy
6. No Mistakes
There must not be a mistake in making the contract. If one or both of
the parties to a contract makes a mistake in the process of making
the agreement, the effect of such a mistake depends on the nature of
the error. A mistake may make the contract invalid where there is no
agreement over the contract.
7. No Misrepresentation or Fraud
A representation is a factual statement made by one party to the
other which is intended and succeeds in persuading the latter to enter
into the contract. If such a statement is false it is a misrepresentation.
If misrepresentation is fraudulent, the insured party can:
(i) Carry on with the contract; or
(ii) He can claim damages if he has suffered a loss, and
(iii) He can either refuse to perform the agreement or rescind the
UNIQUE HEIGHTS JUNIOR & SENIOR HIGH SCHOOL,
INSURANCE THIRD TERM SCHEME OF WORK- YEAR 11
2012/2013 ACADEMIC SESSION
Meaning of insurance market, re-insurance company, insurers buyers
e.g. individual/ private, corporate and public institutions. Insurance
Insurance intermediaries e.g. brokers, agents, loss adjusters etc
Nigeria Insurance Association (NIA)
Purpose of Nigeria Insurance Association, Roles of the Association
Nigeria Insurance Association(NIA)
Membership of Nigeria Insurance Association, Membership
requirements of NIA.
Nigerian Council of Registered Insurance Brokers (NCRIB)
Meaning of NCRIB, purpose of NCRIB,
Nigerian Council of Registered Insurance Brokers (NCRIB)
Roles of NCRIB, membership of NCRIB
Common insurance terminology I
Accident, act of God, actuary, adjuster, arson, binding
authority, broker etc
Common Insurance Terminology II
Cancellation, certificate of insurance
(in detail)commission, covers, cover note, disaster, disclosure etc
Insurance Market can be defined as the facilities that are
available for placing of insurance and the different kinds
of professional risk bearers available.
Insurance Market consists of the buyers of insurance and
the sellers together with the intermediaries (agents) who
bring the two together. In addition there are also the
regulators, representative bodies or organizations,
consultants and technical advisers which are part and
parcel of the market.
This is the person who has valid insurable interest in a subject matter
of insurance i.e., anyone who is legally recognized with property or
pecuniary interest, can insure their interest.
The relationship may arise through ownership, part-ownership or
responsibility for goods, or liability to pay damages or certain
In Nigeria the buyers of insurance can be segmented as follows:
(i) Individuals and families
(ii) Business Organization
(iii) Charities, Clubs and other Organizations.
(iv) Governments (federal, state, local) and their agencies
Other insurance buyers are;
(i) Manufacturing industrial concerns
(ii) Small and medium scale industries
(iii) Banking industry
(iv) Health institutions
(v) Tourist and hospitality industries, hotels
(vi) Transport industry
(vii) Educational institutions
The demand for insurance by individuals depends on their
financial position. As a person’s income rises, he can afford to
buy the financial security provided by insurance. A rise in a
person’s income enables the person to acquire more property such
as; a car, a house and household goods, which will in turn create
the need for insurance protection.
The demand for insurance by business buyers is a function of
economic development. As an economy grows, more capital -
intensive methods of production tend to be employed. This will in
turn increase the demand for property insurance for the protection
of property and liability insurance to compensate employees,
consumers and third parties for injury or damage to property
resulting from the activities of business organizations.
Charities, Clubs and other Organizations.
This third group of insurance buyers tends to demand for
insurance when their activities and income increases.
An increase in activities increases the needs for group personal
accident for the protection of their members and property
insurance for the protection of their assets.
Governments and Government Agencies/Corporations
The need for insurance by these buyers is mainly to protect
governments’ assets movable or immovable. In the case of
agencies /corporations, the need for insurance protection is
obvious due to the fact that some of their activities are hazardous.
For instance, NNPC needs to insure its assets and there is need to
In fact, no aircraft can be allowed to fly in the air space of another
country without insurance protection.
The sellers or suppliers of insurance are the insurance
companies and the reinsurance companies. At present
there are about 118 registered insurance companies and
5 registered reinsurance companies.
Most of the insurance companies are incorporated
pursuant to Companies and Allied Matters Act 1990.
About 106 of them are private limited liability
companies while the rest are public companies. About
sixty companies underwrite life assurance business
with five operating as specialist life offices.
The reinsurers provide technical security and capacity
for the insurance companies and do not supply
insurance directly to the consumers.
The intermediaries are mainly insurance agents and insurance
(a) Insurance Agent
An insurance agent is a person employed to act for another called
the principal who is to bring the principal into contractual
relationship with the third party.
Features of insurance agent
(i) Agents are always on part time basis
(ii) They are not expert in insurance
(iii) They are remunerated by way of commission
(iv) Sometimes he has limited power to issue cover note
(v) Agent cannot be sued for professional negligence
An intermediary, who acts on behalf of a person who is applying for
insurance. They earn a commission from the insurer, however, they
have a responsibility to obtain the best cover for the best price
Features of insurance brokers
(i) He places business with insurers.
(ii) He is a full time insurance specialist of professional standing.
(iii) He studies the insurance needs of his client.
(iv) At times he carries out the physical inspection or survey of the
clients business premises
(v) He makes recommendation when necessary with a view to
improving the physical hazard of the risk.
(vi) He negotiates claim settlement with the insurers and loss adjusters
(vii) He is rewarded by way of commission by the insurers.
(viii) A broker can be sued for professional negligence
(ix) A broker is an agent of the insured and not an agent of insurance
The Nigeria Insurers Association (NIA) is the central
professional body of all registered insurance companies in
Nigeria. NIA was established in 1971.
The objects of the Association are embodied in detail in the
Memorandum of Association. Some of them are highlighted as
(i) To protect, promote and advance the common interest
of insurers in Nigeria.
(ii) To advise members on any action or proposed action by
Government or any other Authority in connection with any
legislation or policy.
(iii) To advise or consult with the Government regarding any act
or thing done or being contemplated by it or its Agencies or
other statutory bodies with regard to any matter relating to
(iv) To guide and assist members in complying with any statute,
regulation, order and Government directive relating generally to
the business of Insurance.
(v) To create better understanding of Insurance by all sections of the
community including the furtherance of knowledge and
research on Insurance and related matters.
(vi) To collect, collate and disseminate statistical, economic
and other information relating to Insurance.
(vii) To maintain constant dialogue with other trade Associations in
the Insurance industry with a view to fostering good relationships
between them, the NIA as well as the insuring public.
(viii) To confer, consult, maintain, contact and co-operate with
any individuals, associations, societies, institutions or bodies
within or outside Nigeria having objects similar to those of the
(ix) To promote personal and friendly relationship among members
of the Association; holding conferences and meetings for the
discussion of technical and professional matters, relevant to
1. A & G INSURANCE PLC
BAICO PLAZA, 12, ABIBU OKI STR., OFF MARINA, V/I P. O. BOX
2. ADIC INSURANCE COMPANY LIMITED
5TH & 6TH FLOOR, NACA HOUSE, 43, AFRIBANK STR., VICTORIA
3. AFRICAN ALLIANCE INSURANCE COMPANY LIMITED
112, BROAD STREET MARINA P. O. BOX 2276, LAGOS.
4. AIICO INSURANCE PLC
HEAD OFFICE PLOT PC 12, AFRIBANK STR., V/I, P. O. BOX 2577,
5. ANCHOR INSURANCE COMPANY LIMITED
7/13 AKA ROAD, P.M.B. 1151, UYO, AKWA IBOM STATE.
6. CAPITAL EXPRESS ASSURANCE LIMITED
CAPITAL EXPRESS HOUSE, 13 BISHOP KALE CLOSE BEHIND
SAKA TINUBU STREET, OFF KASUMU EKEMODE STR., V/I, LAGOS.
7. CONSOLIDATED HALLMARK INSURANCE PLC
PLOT 33D BISHOP ABOYADE COLE STREET, P. O. BOX 74013, VICTORIA
8. CONTINENTAL REINSURANCE PLC
ST. NICHOLAS HOUSE, CATHOLIC MISSION STREET, LAGOS.
9. CORNERSTONE INSURANCE PLC
136, LEWIS STREET, LAGOS. P. O. Box 75370, VICTORIA ISLAND, LAGOS.
10. CRUSADER GENERAL INSURANCE LTD.
23/25 MARTINS STREET, LAGOS.
11. CRYSTAL LIFE ASSURANCE PLC
ELEGANZA HOUSE,12 FLOOR 15B, JOSEPH STREET, P. O. BOX 1514, LAGOS.
12. CUSTODIAN AND ALLIED INSURANCE LIMITED
STILLWATER HOUSE, 14B KEFI STREET, S.W. IKOYI, LAGOS.
13. EQUITY ASSURANCE COMPANY PLC
1196 BISHOP OLUWOLE STREET, VICTORIA ISLAND, P. O. Box 1514, LAGOS.
14. FIN INSURANCE COMPANY LIMITED
34, GANA STREET, MAITAMA ABUJA F.C.T., NIGERIA.
15. GOLDLINK INSURANCE PLC
6 EMMANUEL STR., MARYLAND, IKEJA P. O. BOX 5987 MARINA, LAGOS.
16. GREAT NIGERIA INSURANCE PLC
8, OMO OSAGIE STREET, SW IKOYI, LAGOS.
17. GUINEA INSURANCE PLC
REINSURANCE BUILDING, 10TH FLOOR 46, MARINA, P. O. BOX 1136,
18. INDUSTRIAL & GENERAL INSURANCE CO. LTD.
PLOT 741, ADEOLA HOPEWELL STR., V/I, P. O. BOX 52592, FALOMO, LAGOS.
The Nigerian Corporation of Insurance Brokers was
established in 1962 to provide a central organization for
the regulation of all practicing Insurance Brokers in
This body got its first legal recognition in 1991 when
the Insurance Decree N0 58 of 1991 made compulsory
for all practicing Insurance Brokers to be members of
this body before being registered by the Commissioner
i. To establish and maintain a central organization for
ii. To maintain a well equipped library.
iii. To collaborate as appropriate with government and with
various institutions and professional bodies in achieving the
objectives of the Council.
iv. To organize as it deems fit along or in association with other
institutions or professional bodies, Conferences, Seminars
and workshops on general and specific areas of insurance.
v. To ascertain the law and practice relating to insurance.
vi. To formulate and maintain a standard of conduct for
members and to encourage the appropriate professional
attitudes by members.
vii. To invest the fund of the corporation for the well being of
viii. To maintain a high standard of conduct among its members.
A.O. RICHARD INS. BRKS.
9, OHIAMINI RD, OFF RUMUOLA RD, BOX 8717, PORT HARCOURT.
ACCORD NIGERIAN INSURANCE BROKERS AND CONSULTANTS
41/43 BOMBAY CRESCENT, APAPA LAGOS
Accredited Insurance Brokers
14, Abubakar Kigo Road, P. O. Box 4202 Kaduna
ACCURATE INSURANCE BROKERS
45, ADEBOYEJO ST. OFF IJESHA EXP. ROAD B/STOP, IJESHA TEDO,
ACELINE INSURANCE BROKERS
SUITE B28, EKO COURT KOFO ABAYOMI Victoria island, lagos
ACI INSURANCE BROKERS
PLOT 68, ARCADE CLUB SUITS, 1ST AVENUE, BY SHEHU
SHAGARI WAY ABUJA.
ACORN INSURANCE BROKERS
223, IKORODU ROAD LAGOS
ADOGOLD INSURANCE BROKERS
96 Secretariat Road, Rafag Plaza, Beside After Seven Hotel, Ado - Ekiti
ADS INSURANCE BROKERS.
PLOT 652, 20, ABA CLOSE, AREA 8, GARKI
AFN BROKERS LTD.
7, AJAO RD. OFF ADENIYI JONES AVENUE, OPP. WAHUM, IKEJA,
AFRIBANK INSURANCE BROKERS
1. OLADELE OLASHORE STREET VICTORIA ISLAND.
African General Insurance Brokers Ltd.
77, Toyin Street, off Keffi, S/W Ikoyi, Lagos.
African Insurance Brokers Ltd.
25, BOYLE STREET, ONIKAN KAGOS
ALBERT THOMAS INSURANCE BROKERS LIMITED
3, SAMUEL MANUWA STREET, VICTORIA ISLAND, LAGOS
ALFAM INSURANCE BROKERS
29, BERKLEY STREET, LAGOS.
ALL STAR INSURANCE BROKERS
SUITE 204, PLOT 855 DANYADODO HOUSE, GARKI ABUJA .
75 (59) CHIME AVENUE, NEW HAVEN, P. O. BOX 1179, ENUGU
ALPHA CHOICE INSURANCE BROKERS
299, IKORODU ROAD, LAGOS
Copy and complete the following statements
1. ____ and ___ are two types of Agent
2. NICON stands for_______
3. NICON was established in ____
4. The commission given to a broker is referred to as ______
5. The consideration for insurance contract is _____
6. NIA stands for ______
7. NIA was formed in _____
8. The money paid to insured by the insurer out of mercy or favour is called
9. The uncertainty of loss is known as _____
10. A document setting out a contract of insurance is referred to as _____
11. A person who places insurance business is called ______
12. A demand by the insured for payment under his policy is called ____
13. A document issued by an insurance company giving temporary cover pending the
issuance of a certificate is called ____
14. ____ type of hazard has to do with human conduct or behavior aspect of risk.
15. Utmost Good Faith is also referred to as ________
16. A policy holder is also called _____
17. An application to an insurer for the provision of insurance is called _____
18. A person who is not a party to a particular contract but becomes involved with it is
19. The maximum liability of insurer as specified in a policy is known as _____
20. In insurance, days of grace is always between ____ to ___ days.
Copy and complete the following statements
1. Part time and full time agent are two types of Agent
2. NICON stands for National Insurance Corporation of Nigeria
3. NICON was established in 1969
4. The commission given to a broker is referred to as brokerage
5. The consideration for insurance contract is premium
6. NIA stands for Nigeria Insurance Association
7. NIA was formed in 1971
8. The money paid to insured by the insurer out of mercy or favour is called
9. The uncertainty of loss is known as risk
10. A document setting out a contract of insurance is referred to as policy document
11. A person who places insurance business is called insurance broker
12. A demand by the insured for payment under his policy is called claim
13. A document issued by an insurance company giving temporary cover pending the
issuance of a certificate is called cover note
14. Moral type of hazard has to do with human conduct or behavior aspect of risk.
15. Utmost Good Faith is also referred to as uberrima fidei
16. A policy holder is also called an insured
17. An application to an insurer for the provision of insurance is called proposal
18. A person who is not a party to a particular contract but becomes involved with it is
called third party
19. The maximum liability of insurer as specified in a policy is known as sun insured
20. In insurance, days of grace is always between 15 to 30 days.
The Institute was established in 1981 as a professional
association of all registered loss Adjusters in Nigeria.
Aims/Objectives of ILAN
i. To engage in activities that will ensure the general
welfare and public well being of Insurance
adjusters in Nigeria.
ii. To encourage its members to attend and participate
in conferences, symposia and other training
iii. To provide unified code of conduct for its
The Commission was established by National Insurance
Commission Act No.1, 1997 to ensure the effective
administration, supervision, regulation and control of insurance
business in Nigeria.
The Commission thus derives its powers from both the National
Insurance Commission Act, and the Insurance Act 2003.
The Commission registers and grants licenses to insurance
companies, insurance agents, insurance brokers, and loss
adjusters. The inspectorate department of the Commission
carries out routine and special investigations of operators to
ensure that they operate according to the provisions of
Insurance Act 2003 the relevant Regulation and Policy
In serious cases of breach of the provisions of the law and
insolvency, the Commission has powers to suspend an operator
from carrying on business, withdraw license, take over the
management, or liquidate the company or firm.
i. Establish standards for the conduct of insurance business in Nigeria.
ii. Approve rates of insurance premiums to be paid in respect of all
classes of insurance business;
iii. Approve rates of commissions to be paid in respect of all classes of
iv Ensure adequate protection of strategic Government assets and other
v. Regulate transactions between insurers and reinsurers in Nigeria and
Vi Act as adviser to the Federal Government on all insurance related
vii. Approve standards, conditions and warranties applicable to all classes
of insurance business;
viii. Liaise with and advise Federal ministries on all matters relating to
ix. Protect insurance policy-holders and beneficiaries and third parties to
x. Contribute to the educational programmes of the Chartered Insurance
Institute of Nigeria and the West African Insurance Institute.
1. Accident .An unplanned and unexpected event which occurs suddenly
and at a particular place.
2. Act of God: An event or occurrence due to natural causes which occurs independently of
human intervention and either could not be foreseen, or if foreseen, could not be
reasonably guarded against. (e.g. storm, flood, earthquake, cyclone)
3. Actuary: Actuaries analyse and manage the risks of financial contracts.
The actuary's work is based on the application of mathematical, statistical, economic and
financial analysis to a wide range of practical problems in long-term financial planning and
management. Actuaries act as financial advisers to a variety of commercial organisations such
as life, general (non-life) and health insurance companies, superannuation funds, banks and
stockbrokers as well as governments.
4. Adjuster: An Adjuster is a representative of the insurer who seeks to determine the extent of the
company's liability for loss when a claim is submitted.
5. Agreed Value: A car's agreed value is set at the beginning of each period of cover.
It is based on the fair value given then for the cars make and model in the motor
trade's most commonly accepted price handbook. The value doesn't change for the
period of cover.
6. Amount covered: The current amount covered is shown on the most recent of
insurance schedules and the renewal notice. It is the you’re your insurer will pay, less any
excess, for a claim that is covered by the policy.
7. Arson Any unlawful setting of fire to property.
8. Ab initio: From beginning
9. Agent: A person who acts on behalf of another (the principal). He introduces business for
which he receives commission. He acts for insurer or insured or for both
10.Arbitration: The use of an independent person to settle a dispute between an insurer and the
Copy and complete these statements
1. Insurance is associated with ______
2. _____ is a temporary policy of insurance
3. Extra days given to the insured to renew his insurance policy is referred to as ______
4. The act of throwing or casting goods overboard in order to lighten a ship and save it from danger is called ____
5. In insurance, to indemnify means , to _______
6. Payments made by the insurance company out of sympathy to the insured outside its legal obligations is known as _____
7. Brokerage is the commission given to _______
8. A fact that would influence a prudent underwriter on whether to accept a risk, under the terms and at what premium
is called ________
9. The right possess by the underwriter/insurer to recover a loss from a third party by taking on the right of the insured is referred
to as _______
10. The person that holds an insurance policy is called _______
11. An agreement made between two or more persons which is intended to have legal consequences is referred to
12. NICON stands for _________________________________
13. The possibility of occurrence of unpredictable or unplanned events which may result in loss is regarded as _______
14. Those risks which involve the possibility of either gain or loss is called ______
15. Any circumstance that promotes the probability of a loss is known as _____
16. Evidence to show that the holder has insured his property is called _______
17. ______ and ______are two types of hazard.
18. Any risk that can be insured is known as _________ risk
19. The amount the insured pays to the insurance company for insuring his property is called _________
20. _______ acts as intermediary and arranges insurance between the insurer and insured on a part time basis.
CLASS: YEAR 11
1. Write short note on the following.
Give the meaning, year of establishment and functions
of each of them.
(a) National Insurance Corporation of Nigeria(NICON)
(b) Chartered Insurance Institutes of Nigeria (CIIN)
11. Assignment: The transfer of a right under a contract.
12. Assurance: This is the term generally used in reference to life
assurance. This is an event that is based on possibility.
13. Barratry: Destruction of ship or throwing goods over board by the
master or crew without good intention.
14. Binding Authority: When a Broker has authority to arrange the
insurance on behalf
of the Insurance. In arranging this insurance the Broker will be
acting as agents of the insurer, not as your agent.
15. Broker: An intermediary, who acts on behalf of a person who is
applying for insurance. They earn a commission from the insurer,
however, they have a responsibility to obtain the best cover for the
best price possible. In certain circumstances a broker can also act
as an agent for the insurer in terms of issuing a policy or collecting
16. Bailee: Someone in legal possession of another person’s property
e.g watch repairer.
17. Brokerage: commission received by a broker.
18. Capacity: the maximum amount of risk that can be accepted.
19. Cargo insurance: Insurance of goods carried by sea.
20. Caveat Emptor: Let the buyer beware.
21. Claim: A demand by the insured for payment under his policy.
22. Commission: The payment to an agent for the introduction or
renewal of business. A fee charged by a broker or agent for
services in the sale of an
23. Composite Insurer: An insurer transacting both life and
24. Conditions: Provision in insurance policy specifying some
25. Contributions: The division of loss between insurers where two
or more covers are provided for the same subject matter and
the same risk are involved.
26. Cover Note: A document issued by an insurance company
giving temporary cover pending the issuance of a certificate.
27. Credit Insurance: Insurance of loan repayments in the event of
unemployment, sickness or death.
28. Cancellation: The termination of a policy before the expiry
29. Carrier: Sometimes used to describe the insurer. Not generally
used because of confusion with carriers of freight.
30. Certificate of Insurance: A certificate that acts as proof that a
policy has been issued. Usually requested by a financial
institution. A certificate that acts as proof that a person has
earned an insurance rating or no claim bonus entitlement.
31. Comprehensive Insurance: Provides specified cover for damage to the insured
car as well as damage the insured car may cause to the property of others.
32. Consequential Loss: A subsequent loss that results from the direct damage e.g.
public transport costs incurred when a car is off the road due to an accident.
33. Cooling off period Federal law provides that you can cancel your policy within
14 days of its purchase date.
34. Cover(s) :Means the protection provided by the policy.
35. Coverage: The scope of the protection provided under a contract of insurance.
36. Depreciation: A decrease in the value of any type of property over a period of
time resulting from use, wear and tear, or obsolescence.
37. Defamation: The act of publishing an utterance to a third party, including
verbally, which causes injury to the honour or reputation of another.
A defamatory statement can take two basic forms, Libel, which is a defamatory
statement in permanent form such as in writing or by other media. Slander,
defamation in transient form such as an oral communication.
38. Direct insurer :Is an insurer which deals direct with the consumer rather than
through an intermediary or agent
39. Deductible: The amount to be borne by the insured prior to the payment of the
remainder of the claim.
40. Deposit premium: First premium paid by the insured prior to the calculation of
the full premium
41.. Disclosure: The duty of a proposer to reveal all material facts that might affect the insurance.
42. Disaster: A disaster is said to have occurred when the normal community
and organisational arrangements cannot cope with a hazard impact.
43. Due date: The date a policy is in force to and by when a renewal premium
must be paid.
44. Earned Premium: The amount of the premium that has been "used" during the
term of a policy. For example, if a twelve month policy has been active for six months, half of
the total premium has been earned.
45. Effective date: The date on which the cover of an insurance policy commences
46. Employment Practices Liability :Covers a range of liabilities that can face an employer,
following wrongful termination, refusal to employ, failure to promote, demotion, disciplinary,
action, sexual harassment, discrimination or defamation of an employee.
47. Endorsement :Means a special condition that applies to a policy. For example,
an endorsement may state that drivers under a nominated age are not covered under the policy.
48. Excess :An excess on a policy is the first amount that must be contributed by the insured
towards each claim.
49. Expiry date: The date coverage ceases.
50. Extra Cost of Reinstatement :Provides protection for additional cost to comply with
Government Regulations following a loss such as; current regulations may require you to
include a wheelchair access ramp, these types of costs need to be included in your sum insured.
51. Endowment Assurance: Life assurance where the sum assured is paid after a specified period
or on earlier death.
52. Engineering Insurance: The insurance of plant and machinery
53. Ex-Gratia Payment: A payment made by an insurer by way of goodwill or favour where a claim
has been rejected.
54. Excess of Loss: A reinsurance contract that provides cover for all claims amount in excess of
an agreed level per claim.
55. Exclusion: A restriction in the scope of a policy.
56. Fidelity: Losses sustained through fraudulent or dishonest acts committed be
57. Financial Services Guide: Introduces the service provider and sets out to provide:
- who we are;
- how we can be contacted;
- what financial services we provided and how we provide them;
- who we are representing if we are acting under a binding authority;
- what the remuneration (commission) arrangements are;
- what our relationship is to any product issuers; and
- what our dispute resolutions scheme is and how to access it.
58. Fire: Means burning with flames.
59. Flood: Means the inundation or covering of normally dry land by water which: escapes or
overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering,
because other water has already escaped or been released from it, the normal confines of any
watercourse or lake, including any that may have been modified by human intervention, or
reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas
surrounding the site or water escaping from any water main, pipe, street gutter, guttering or
60. Fraud: The term "fraud or dishonesty" encompasses all those risks of loss that might arise
through dishonest acts or omissions.