GNI Boss Lists Benefits of Annuity Plan

Ebere Nwoji

The Managing Director, Great Nigeria Insurance Plc, (GNI) Mrs. Cecelia Osipitan, has listed benefits of pension savings and retirement benefits payment through annuity plan.

Osipitan, who stated this while speaking with journalists on the performance of her company’s annuity business in the first quarter of this year, said her company’s performance in the period was impressive.

She said her company increased annuity premium by over 800 percent in the first quarter of the year from N52.5 million in 2020 to N4.7 billion in 2021.

An annuity is a contract between a person usually a paid worker and an insurance company in which the person makes a lump-sum payment or series of payments to an insurance company and, in return, receives regular disbursements, beginning either immediately or at some point in the future from the insurance company.

It is a long-term investment that is issued by an insurance company and is designed to help protect a saving worker from the risk of outliving his income. Through annuitisation, his purchase payments (what he contributed) are converted into periodic payments that can last for life.

She listed benefits of annuity system of retirement payment over programme withdrawal which involves a pension fund administrator to whom the worker or contributor chose to save his money paying him certain amount monthly for 18 years or through annuity plan which involves the person purchasing annuity plan with a lump sum from an insurance company which commences payment of certain amount monthly through out the person’s life time.

The Great Nigeria Insurance boss, while speaking about his company’s annuity business performance listed some of its benefits to include the continuous flow of regular income for the retiree, insulation from the risks associated with the investment of lump sum benefits, structured management of resources and the transference of the risk of diminution in assets and possible failure of investments of retirees to insurance companies which are better equipped to manage such risks.

In her words, “Insurance remains the most reliable bedrock of our existence and cultivating the culture of insurance can never be over emphasised.”