The statutory minimum group-life cover an employer must carry.
Total minimum cover
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Per employee (3x)
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Employees covered
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A legal obligation, not an employee benefit
Group life assurance in Nigeria is something an employer must carry, separate from and on top of pension. The rule is straightforward: every employer must maintain life cover for each member of staff worth at least three times that person's annual total emolument. If an employee dies in service, that sum is paid to their beneficiaries. This calculator sizes the minimum cover you are obliged to hold, both per person and across your whole team, and it is written for founders, HR leads, and finance teams arranging payroll insurance, not for an individual buying personal life cover.
The base for the calculation is total annual emolument, defined the same way as for pension: basic salary plus housing allowance plus transport allowance. That keeps the two obligations consistent, so the figure you feed the pension calculation is the figure you multiply here. Enter the average annual emolument and your headcount, and the tool applies the statutory multiple of three to produce the cover you must put in place.
Why three times, and what it actually buys
The multiple this calculator applies is three, and it is the floor rather than a target. The intent is to give a deceased employee's family a lump sum equal to roughly three years of their pay, a cushion while they adjust. You are free to insure for more, and some employers do as a recruiting signal, but you cannot insure for less and stay compliant. The premium is borne wholly by the employer. Staff contribute nothing toward it, unlike pension where the employee carries part of the contribution.
The three times multiple and the emolument definition are stable features of the framework, but Nigeria is partway through the 2025 tax reform and several payroll-related rules are in flux. Treat the multiple here as the figure the tool applies, and confirm the current requirement, and the rules on the underlying emolument, with the National Pension Commission, which oversees this obligation, and with the Federal Inland Revenue Service on any tax treatment.
Sizing the cover for a 25 person company
Suppose the average employee earns NGN 3.6 million a year in total emolument and you employ 25 people. Three times NGN 3.6 million is NGN 10.8 million, so each employee must be covered for at least that amount. Across 25 staff the policy must provide at least NGN 270 million of cover in total. That total is the sum assured the insurer underwrites, not the premium you pay, which is a small fraction of it. These figures use the multiple this calculator applies.
Keeping the policy compliant as pay changes
The most common error is letting the cover go stale. Because the sum assured is pegged to current emolument, every time you give raises the required cover rises with them, yet many employers renew last year's policy unchanged. If salaries have moved up and the policy has not, you are under-insured against the statutory minimum even though you hold a valid certificate. Re-run this calculator at each renewal using your latest average emolument, and adjust the sum assured so it keeps pace.
A second point worth knowing: this obligation sits alongside pension, the Nigeria Social Insurance Trust Fund, and any training-fund levy, so when you tally the true cost of an employee, group life premium is one more line. It is usually a modest line, since you are paying a premium rather than the full sum assured, but it should be in the model. A practical tip for lean teams is to ask your broker for a single group scheme covering everyone rather than individual policies, which is almost always cheaper to administer and price for the same total cover.
Is the group life premium tax deductible for the employer?
An employer's premium for statutory group life cover is generally treated as an allowable business expense when computing taxable profit, because it is a cost incurred to meet a legal obligation tied to employment. The exact treatment can shift with the reform, so confirm the current position with the Federal Inland Revenue Service or your tax adviser before claiming it.
How is the premium decided if cover is three times pay?
The three times figure sets the sum assured, the amount paid out on a death, not the premium. The insurer prices the premium off that sum assured along with the age profile of your staff and the claims risk, and it usually lands at a small percentage of the total cover rather than anything close to it. So a NGN 270 million scheme does not cost NGN 270 million. Get quotes from licensed insurers to see the actual annual premium for your workforce.