BusinessInsurance Solutions

Risk and Economy: Salary Insurance

By Ade Fashola
Dear Readers,
Thank you for your patience and welcome back to the continuation of my story on the encounter with Femi, my old school mate.
It was early on Tuesday morning when Femi called, enquiring my location. “Femi, you know that is a security question, how may I help you?” I answered.
“I plan coming to Lagos to discuss something important with you and want to be sure you are in Lagos” he explained.
“I spent my whole day on the island yesterday having meetings, I will be in the office throughout today,” I informed him. “Must you come to Lagos to discuss with me? We can talk on the phone “I told him.
“Call me whenever you are available”, he retorted.
“I thought you said it is important, you want me to use my money to call you to talk to me about your emergency?” I submitted.
“Fash, you know you are a big guy, company pays your phone bill, please call me,” he answered.
“I pay my phone bill myself but I will call you as soon as I get in my car on my way to office, hope you won’t mind my driver listening”, I told him.
“It is not a secret.” He replied.
I called Femi immediately I got on the road and he told me about Adewale.
Adewale is an engineer and was working with one of the NNPC subsidiaries. Adewale was doing very well the last time I heard about him. Femi started the story about how Adewale lost his job, started business but due to lack of experience got into debt, all within two years. Now the reason for Femi’s early morning call was to help Adewale sell his house.
“Adewale is planning to move his family out of Nigeria to save face as things are getting really messy and he needs a quick cash”. Femi continued, “Adewale is in a very serious issues, I don’t know what it is but he’s ready to sell the property at a very small money to give him quick exit.”
“All these in 2 years?” I questioned.
“Yes o, in truth it is less than 2 years”. Femi confirmed.
“What of his insurance?” I queried.
“Which insurance?” Femi responded sarcastically.
“Are you saying Adewale neither has a salary insurance when he was working nor a business interruption when he started business?” I asked.
“Fash, don’t start again o, what is salary insurance? I have never heard about that before” Femi submitted.
“Femi, there are various types of personal income insurances, you may get Loss of Employment Insurance Scheme (LoEIS) or Salary Protection Insurance,” I explained to him.
“In Nigeria?” Femi asked.
“Yes, In Nigeria,” I retorted.
“Please tell me about this Loss of job or Salary Insurance? What is income Insurance?” Femi asked.
I then explained, “Income insurance is an insurance cover that can protect you or your business in case of incapacitation. There are several names. Loss of Employment Insurance (LoEIS), Prestige Salary Protection Shield and for business, you have consequential loss or business interruption.”
What is LoEIS or Salary Protection? The purpose of this product is to provide for a given period, a predetermined monthly income for an individual who has lost his/her job for no fault of his or hers. The advantages of this kind of insurance are (1) To protect your financial obligations even after loss of job (2) It helps to guarantee the continuation of your children’s education and welfare. (3) It immunes the employee against frustration and psychological breakdown that follows loss of job (4) It inspires the confidence of being a staff and not a slave in your workplace (5) It helps to maintain economic stability and general standard of living of the policyholder.
Who is qualified for this Insurance? To be eligible for protection under salary Insurance, you must be an employee of a rated company, be in a permanent employment in a qualified occupation, must be earning a minimum salary as prescribed by the scheme and must have an active bank account in any Nigerian Bank. It is of high importance for the members of scheme to be in a regulated industry to avoid selection against the underwriter. If you have questions or clarification about your eligibility, visit
What are the benefits of Salary Insurance? This Policy offers different layers of benefits depending on your circumstances. (1) if you have salary insurance or LoEIS, you are entitled to monthly income of up to your last earned salary for a maximum period of 24 months on a reducing scale method as shown below. This reduction is to stimulate job hunt and desire to return to work. (2) You are also entitled to a supplementary benefit in the event of a member gaining a new employment or having an income generating activities after loss of job and his or her new salary is lower than the lost insured income, the policy will provide the shortfall to place you to your original position of your last employment before the occurrence of the loss of job. (3) A Single Sum benefit is also possible on the ground of advanced age or impaired health status; however, such request shall be subjected to submission of documentary evidence to the insurance company.
What do I need to submit to the Insurer to join? Each member of the scheme must provide information required for the assessment of his eligibility for the scheme (1) Supply all necessary documents required for assessment of his eligibility like identification card and proof of residence. (2) Evidence of details of his earnings, etc. (3) Pay agreed premium as at when due.
Which of the Insurance Companies can I go to buy?Unfortunately, I am not allowed to mention any insurance company but if you visit the website provided above, you will have enough resource to help you with your decision. The website has names of insurance companies, their offices, contacts and other good information for your understanding.

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