A mortgage protection assurance contract is between the life insurer and the lender. The  life insurer promises to pay to the lender the expected outstanding loan if the borrower dies  during the loan repayment period. The lender pays the premium to the insurer, though the  borrower bears the cost of the insurance. Lenders can arrange it on individual borrowers or  as a group mortgage assurance. 

The life policy covers the life of the borrower for the risk of dying prematurely during  the loan repayment period. The period can range between five to 20 years, depending on  the loan agreement.  

Mortgage loans are repayable in instalment over the loan repayment period. Thus,  the principal reduces with each instalment payment. The sum assured also reduces as the  principal. On premature death of the borrower, the life insurer is liable to repay the  expected outstanding principal, normally attached as a schedule to the policy. A mortgage  protection assurance is thus a Decreasing Term Assurance and the life insurer considers the  decreasing nature of its liability to calculate the premium.  

The following is an example of a GhC500,000 mortgage loan repayable over 20 years  with annual principal repayment of GhC25,000. 


Year Principal Sum Assured 

1 500,000 500,000 

2 475,000 475,000 

3 450,000 450,000 

4 425,000 425,000 

. . . 

. . . 

20 25,000 25,000 

If the borrower dies in year 4, the life insurer pays GhC425,000 to the lender


A decreasing term assurance is a protection only contract that pays the lender if the  borrower dies during the loan repayment period. The life insurer charges the cost of the risk  of premature death, and a loading for expenses to cover things like commission, medical  examination and management expenses. Since mortality cost is the main factor, the  premium is relatively low compared with other types of life policies. 

There are two premium payment options: single premium or level premium payable  annually. For a single premium the policyholder pays a lump sum at the beginning of the  contract to cover the loan repayment period. It is actually a discounted value of the level  annual premium.

The level premium is payable annually at the beginning of each policy year. Readers  may expect that the premium will also be reducing as the sum assured on a mortgage  protection assurance policy reduces. The life insurer takes the reducing nature into account  by collecting the level premium over a shorter period than the loan repayment period. For  example, if the loan is repayable over a 20-year period, the life insurer may collect the level  premium for 15 years, five years shorter than the policy duration.  

If the contract is a group contract with a register of members, the lender pays the  premium on all the borrowers in the register at the beginning of each policy year. When a  borrower completes their instalment payment or dies, the life office removes the name  from the register.

Profile of Amos Adeoye Falade 

Mr Falade is a 1980 graduate of the University of Ibadan.  He holds a Bachelor of Science, Second Class Honours  (Upper Division) Degree in Economics (1980) and Master  of Communication Arts Degree (2002) from Ibadan. He is  an Associate, Chartered Insurance Institute, London  (ACII) 1985 and Associate, Chartered Institute of  Stockbrokers (ACS) 2010. He also holds the Authorized  Dealing Clerk’s Certificate of The Nigerian Stock Exchange (2011). He is a Member, Equipment Leasing Association  of Nigeria (ELAN); Member, Institute of Financial  Planners. He is also a Fellow of the West African  Insurance Institute. 

He specialized in Life Insurance and Pension in his  insurance career that commenced in 1975. He attended several courses on life insurance including Actuarial  Aspects of Life Insurance by Swiss Re/West African  Insurance Institute, Monrovia, Liberia (1984) and India’s  National Insurance Academy (1997). 

He taught several generations of student life  insurance and pension preparatory for the professional  examinations of the Chartered Insurance Institute,  London from 1987, and Chartered Insurance Institute of  Nigeria from 1989. Since 2002, he has taught Pension 

Planning & Administration and Life Insurance at the West  African Insurance Institute, Banjul, The Gambia where he  is a Visiting Lecturer. He is also a resource person for the  Association of Investment and Portfolio Managers. 

He held top management positions in the financial  services industry. He was Head of Pension in Niger  Insurance (1982 to 1988); General Manager (Life and  Pensions), Nigerian French Insurance Company Limited  (1988 – 2003); General Manager/Chief Executive Officer,  Guardian Express Assurance Limited (2003 – 2008) where  he retired. He was Managing Director/Authorised Dealing  Clerk, Golden Capital Plc (2011 – 2014). He is currently a  Stockbroker/Dealer on The Nigerian Stock Exchange. 

He held several positions in the insurance industry  before retiring in 2008. He was Chairman, Life Offices Committee (2003 – 2006) and a Member of the  Governing Council of the Nigerian Insurers Association (2007 – 2008). He represented the Association in many  national assignments including the Securities and  Exchange Commission’s Committee on Pension (2001/2002), and Central Bank of Nigeria’s Financial  Systems Strategy (FSS 2020). 

Mr Falade is a writer. He has written many articles  on life insurance and pensions published in local and  international professional journals. His four books on 

Life Insurance and Life Annuity are in the process of  publication.



Ebenezer Odartey Lamptey

I was born in the Eastern part of Ghana called Koforidua. I'm 43 years old and married to a beautiful wife (Eunice). I was brought up by my mother alone when our family was broke down by my Mom's best friend who turned out to be my Daddy's second wife. Life was difficult where my mum had to do other menial jobs to feed me after she was fired from work for taking me with her to work. What my mum knew was to educate me to get good grades and get the best paying job which she thought was becoming a medical doctor. finally, I ended up in the insurance industry and working for almost a decade. I enjoyed one moment in life when my mother visited me in the western part of the country while on leave. we had the best time when I picked her on my back to show how I wished we are together and my kids pulling her clothes to come down for their turn, ( Grand Maaa, Grand Maaa, it's my turn to be picked by Daddy); Unfortunately, she had a mild paralysis when her Blood Pressure raised and there was no one with her that night when she left my place to her lonely apartment. She died after six months while bedridden. I felt I have enough time for my family afterward. It never happened since I was enslaved to work from 9 to 5. I was not able to move from my comfort zone for my passion which will give me time for my family. Today, I have found what makes me happier and have more time for the people that I care for. My family time together for a silly walk and talk, questions my kids ask which take them to where they want to be in the next 100 years today. They are adults in their own world and their mind is like a lump of wet clay that whatever I print on it will stack which is the best time to give them the best they need from their mentor. I now know my wife also has a passion too.

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