AIICO Insurance faces backlash after a Nigerian policyholder alleged fraudulent surrender practices, hidden deductions, and regulatory silence over a ₦1.1 million loss linked to its Flexible Endowment Plan
A storm is gathering around AIICO Insurance Plc following explosive allegations by a Nigerian policyholder who says what was marketed to him as an “investment with protection” ended in massive financial loss, endless frustration, and what he described as deeply questionable deductions.
In a lengthy exposé posted on X (formerly Twitter) on May 24, 2026, Oladeji Sofoluke accused the insurer of systemic deception and predatory practices in the handling of his Flexible Endowment Plan (FEP), a long-term savings and life-cover product.
According to Sofoluke, he committed roughly ₦4.15 million in premiums into the 15-year plan beginning in June 2020. He also claimed he was later compelled to pay an additional ₦811,000 reinstatement fee in March 2026 after a break in payments.
But when he eventually decided to exit the policy in February 2026 after becoming dissatisfied with the arrangement, AIICO allegedly presented him with a Surrender Discharge Certificate dated April 21, 2026, offering ₦3,835,331 as final payout. By his calculation, that translated into a loss of more than ₦1.1 million from his own contributions.
The certificate reportedly required him to accept the amount as “full and final settlement,” effectively shutting the door on any future claims once signed.
Sofoluke painted a troubling picture of his dealings with the company.
He described AIICO’s customer support as the worst he had personally encountered, alleging prolonged silence, pressure to continue premium payments, and a complete lack of transparency around the status of his investment.
At one point, he claimed the company went silent for 41 days after acknowledging receipt of his payment evidence in March 2026. He further alleged that he was instructed to send his physical policy booklet before any surrender process could move forward.
Another major point of contention was the reinstatement fee.
Sofoluke said the company initially requested around ₦275,000 after his payment interruption between 2022 and August 2023, only for that amount to later rise dramatically to ₦811,000. He questioned the basis for the increase, insisting the policy terms indicated interest penalties should only apply after two years of inactivity.
However, the biggest shock, according to him, came from deductions tied to the life-cover component of the policy.
Sofoluke alleged that AIICO deducted almost ₦3.996 million under what the insurer described as “premium for the life cover enjoyed for the four years.”
He maintained that he was never properly informed he had signed onto a separate high-cost life insurance structure capable of consuming such a huge portion of his payments upon surrender.
The policy excerpts he shared online reportedly referenced “SURRENDER VALUE” and “CASH VALUE” provisions and stated that policies become eligible for surrender after two years. But, according to him, there was no clear warning that the life-cover portion could effectively wipe out substantial capital contributions if the policy was terminated early.
He further revealed that AIICO allegedly offered him another option: refund only the payments made after 2023 while forfeiting about ₦900,000 previously paid, without interest.
Frustrated by the experience, Sofoluke escalated the matter to regulators including the National Insurance Commission, Securities and Exchange Commission Nigeria, and Federal Competition and Consumer Protection Commission. According to him, none acknowledged his complaints despite being publicly tagged.
The controversy has also revived memories of another high-profile complaint involving AIICO in 2025.
At the time, investigative platform FIJ reported the case of Florence Nwabueze, who allegedly paid ₦7.21 million into two separate 15-year Cash Accumulation Plans, products structurally similar to savings-backed life insurance policies. She was reportedly offered just ₦2.67 million as surrender value after exiting the plans in 2022, amounting to a forfeiture exceeding ₦4.5 million.
Like Sofoluke, she accused the company of opaque calculations, punitive deductions affecting principal contributions, and regulatory silence despite petitions to oversight agencies. AIICO reportedly promised to investigate the matter, but no public outcome emerged.
Official materials on AIICO’s website present the Flexible Endowment Plan as a savings and protection package designed to help customers meet long-term goals while enjoying life insurance benefits.
The company advertises features including partial payouts during the policy term, reversionary bonuses, surrender eligibility after two years, and access to loans tied to accumulated cash value.
Yet critics argue that the marketing language surrounding such products often creates the impression of safe, high-yield investment opportunities while downplaying the financial impact of insurance costs, commissions, and surrender penalties buried in the fine print.
Sofoluke’s experience has reignited concerns about whether some policyholders genuinely understand the long-term structure and risks attached to these plans before signing on.
Founded in 1963, AIICO remains one of Nigeria’s biggest and most recognisable insurance firms, with strong market positioning in life insurance and annuity products. But repeated complaints surrounding surrender values are beginning to cast a shadow over public confidence in the sector.
Also read: Retiree demands for legislative action over fraudulent pension scheme, calls out AIICO
For many observers, the matter goes beyond one customer’s frustration. It raises broader questions about transparency, disclosure standards, and whether regulators are doing enough to protect Nigerians placing long-term savings into insurance-linked financial products.
Oladeji’s closing words captured the anger driving the growing backlash: “Stop showing me shege for my own money and stop proving Nigerians right that you’re frauds.”
Until clearer answers emerge from both the insurer and regulators, the controversy is unlikely to disappear anytime soon.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
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AIICO Insurance Plc – Official Response
We have noted this article and would like to provide important context for your readers.
AIICO Insurance takes every customer concern seriously, and we have engaged, and continue to engage, directly with the customer on the matter referenced. While we will not discuss the specifics of any individual policy in a public forum, out of respect for customer confidentiality, we wish to clarify the principle at the heart of this dispute.
The policy in question is a long-term life insurance and savings product. As is standard for such products globally, a portion of premiums paid funds the cost of the life insurance protection enjoyed by the policyholder throughout the life of the policy, while the remainder accrues as cash value. The surrender value payable upon early termination is therefore based on the accumulated cash value as defined in the policy contract — not a refund of total premiums paid. These provisions, along with terms relating to lapse and reinstatement, are clearly set out in the policy document issued to every customer at inception.
We acknowledge that long-term insurance products can be complex, and we remain committed to helping our customers understand the structure of the contracts they hold. In this case, we have offered options aimed at an amicable resolution and re-engaged the customer to walk through the signed contract together.
AIICO Insurance has operated in Nigeria for over six decades, and we remain firmly committed to fairness, transparency, and full compliance with our regulatory obligations. We will continue to handle this matter, and every customer concern, in line with the terms of the contracts we are mutually bound by.
With all due respect Mr Adenekan, your company, AIICO Insurance is a fraudulent organisation, aided and abetted by the Staff. First of all, the FEP isn’t a savings plan, it is an investment plan foremost. Even if tis savings, what’s the principle of savings? To preserve wealth value, while investment is to multiply wealth. AIICO actions in this case didn’t obey ANY of these principles. You claim part of the premium covers the life insurance, where in the marketing booklet or the T& C was this stated? And if it is part and not a fraudulent action why is AIICO deduction for life insurance for 4yrs more than the payout awarded to me? If you guys ain’t frauds, how are you not ashamed that after having my investment for 6yrs, you want to pay out a value lower than what was invested in the guise of deducting insurance premiums, not agreed. Who am I or what exposure do I have that will make my yearly life premium quote N1m?! Do you know the kind of individuals with such premium rate and what the assured sum of claim payment for their family at their demise? But you want to get that from me for nothing.
AIICO should just pay my money & let’s get done here. This is my biggest regret, when I could have put my investment where it would have made good appreciation, rest of mind and withdrawn easily without any hassles.