Group Life Assurance Allocation Sees Significant Increase in 2025 Appropriation Bill
The Federal Government of Nigeria has demonstrated a heightened commitment to the welfare of its workforce by substantially increasing the allocation for group life assurance in the proposed 2025 Appropriation Bill. This allocation, which falls under service-wide votes, has been augmented by a remarkable 80 percent, reaching a total of N17.31 billion. This encompasses coverage for all Ministries, Departments, and Agencies (MDAs), including the Department of State Services, insurance of sensitive assets, and members of the National Youth Service Corps (NYSC), along with administrative and monitoring expenses. This significant increase reflects a growing awareness of the importance of providing financial security to the families of employees in the event of unforeseen circumstances.
The legal framework for group life insurance is firmly established in Nigeria. Section 4 (5) of the Pension Reform Act (2014) mandates employers to establish group life insurance policies for their employees. This policy ensures that dependents of deceased employees receive a benefit equivalent to three times their total annual emolument, providing a crucial safety net in times of grief and financial vulnerability. Furthermore, Section 5.5 of the Revised Guidelines on Group Life Insurance Policy (GLIP) for Employees stipulates that employers must prominently display a copy of the GLIP certificate within their premises. This transparency ensures that employees are aware of the policy’s existence and serves as evidence of compliance.
The 2025 allocation represents a substantial increase compared to the previous year. In 2024, the Federal Government allocated N9.6 billion for the renewal of group life insurance for its workers. This amount was distributed among 12 local insurance firms to provide coverage for federal employees against unforeseen eventualities while carrying out their duties. The Minister of Information and National Orientation at the time emphasized the importance of this coverage in providing financial support to families in the event of death or severe injury.
Beyond the substantial allocation for group life assurance, the proposed 2025 budget incorporates various other provisions for employee benefits and social welfare. A noteworthy allocation of N12.42 billion has been designated for the insurance of sensitive assets belonging to the Federal Government. Moreover, under the heading of social benefits within service-wide votes, N55.64 billion has been earmarked for gratuity payments, N914.17 billion for pensions, and N45.92 billion for death benefits. This comprehensive approach demonstrates a commitment to providing a robust social safety net for government employees and their families.
The budget also addresses the financial needs of former government officials and retirees. N2.30 billion has been allocated to cover the entitlements of former presidents, heads of state, vice presidents, and chiefs of general staff. Furthermore, N24.01 billion has been set aside for the benefits of retired heads of service and permanent secretaries, while N1 billion is designated for severance benefits to retired heads of government agencies and parastatals. These allocations acknowledge the past service of these individuals and strive to ensure their financial well-being.
The Federal Ministry of Education has also incorporated provisions for group life insurance and insurance benefits for deceased staff members within its budget. A new line item worth N84.76 million has been created to address these needs, encompassing staff welfare-related matters, staff ID cards, performance enhancement programs for nurses and midwives, repatriation allowance, and staff health/medical requests. This dedicated allocation demonstrates the Ministry’s focus on the well-being of its employees. In addition to the Ministry of Education’s allocation, the NYSC and 14 other ministries, departments, and agencies have collectively budgeted around N1.41 billion for insurance premiums in the 2025 Appropriation Bill. The NYSC alone has earmarked N1.25 billion for insurance premiums, underscoring its commitment to providing comprehensive coverage for its members. Several other agencies have also allocated funds for insurance premiums, ensuring their staff members are protected against potential risks. These allocations highlight the government’s broader commitment to prioritizing the welfare of its employees across various sectors.
