Group life Assurance has been seen as very important in an organization’s quest to improve the welfare of its members of staff.
It guarantees compensation to the bereaved family of the dead employee who dies within the term of the policy.
As a result, the Federal Government of Nigeria decided to make it mandatory for any organization having up to five employees to take up a Group Life Assurance for such employees by coming up with the section 9 (3) of the Pension Reform Act 2004 which states inter alia that:
In addition to the staff pension scheme, employers shall maintain life insurance policy in favor of the employee for a minimum of three times annual total emolument of the employee.
The sector further explains what constitutes the employee’s total emoluments as the summation of Annual basic salary, Transport and Housing allowance.