musa lent obinna the sum of N2,000,000 i february 2015 which he promised to pay back at the end of the year.. musa decided to effect a life policy on obinna...

Answer Details

The peril insured against by Musa is death. A life policy is a type of insurance that provides a death benefit to the beneficiary of the policy if the insured person passes away. In this case, Musa has taken out a life policy on Obinna for the sum of N20,000. This means that if Obinna were to pass away before the end of the year, Musa would receive N20,000 from the insurance company. Since Musa lent Obinna a large sum of money, it is likely that he wants to protect himself in case Obinna is unable to repay the loan due to unforeseen circumstances such as death. By taking out a life policy on Obinna, Musa is ensuring that he will receive some financial compensation in the event of Obinna's death, which could help to offset the loss of the loan repayment.