GUIDELINES FOR LIFE INSURANCE POLICY FOR EMPLOYEES
Policy · Finance
Guidelines specify mandatory life insurance coverage for employees under the pension scheme. They target employers, insurance companies, and employees' dependants. This ensures financial protection for families in case of death.
GUIDELINES FOR LIFE INSURANCE POLICY FOR EMPLOYEES
What Is This Policy?
PenCom guidelines specifying the mandatory life insurance coverage that all employers must provide for their employees under the Contributory Pension Scheme, and the conditions for payment of group life insurance benefits.
Who Does It Target?
All employers with employees under the CPS Licensed life insurance companies Employees and their dependants/beneficiaries PenCom and NAICOM as dual regulators
What Does It Aim to Achieve?
Ensure all employees under the CPS are covered by mandatory group life insurance, providing their dependants with a lump sum death benefit in the event of death in service.
Key Features
Mandatory Coverage: All employers must purchase a group life insurance policy covering every employee for a minimum of three times their annual total emolument. Death Benefit Payment: Upon death in service, the insurance benefit is paid to the deceased employee's nominated beneficiaries in addition to the RSA balance. Insurer Approval: Group life insurance policies must be placed with NAICOM-licensed life insurance companies. Claims Process: Defines the documentation required for beneficiaries to file and receive death benefit claims.
Current Status
Rollout Stage: Active Coverage: All employers and their employees under the CPS Beneficiaries: Employees and their dependants/beneficiaries Funding: Employer-funded insurance premium
How to Access
Employees must maintain current beneficiary nominations with their employer and PFA Beneficiaries should file claims promptly upon the death of an employee Employers must renew group life policies annually without gap in coverage Application method: Employees' claims filed through the employing organisation to the insurer.
Important Terms
Failure by an employer to maintain mandatory life insurance cover is a violation of the Pension Reform Act The insurance benefit is separate from and in addition to the RSA balance Premiums are a mandatory employer cost and may not be deducted from employee salaries
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom) / NAICOM
Legal Framework
Issued under the regulatory powers of the National Pension Commission (PenCom) pursuant to the Pension Reform Act 2014, which mandates employer-paid life insurance. Operates alongside the Insurance Act 2003, the National Insurance Commission (NAICOM) Act, the Labour Act (Cap L1 LFN 2004), and the Companies and Allied Matters Act (CAMA) 2020. Aligns with ILO Convention No. 102 on Social Security (Minimum Standards) on survivors benefits.