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Endowment insurance: the most favorable contract terms

Due to low interest rates on deposits, Kazakhstanis began to size up endowment life insurance, as it is much more beneficial to conclude an agreement with a life insurance company and start getting an additional passive income than to keep money in a bank or buy securities spending money on a broker or paying taxes. Andrey Dzheksembayev, Acting Chairman of the Management Board of JSC Halyk-Life, spoke about the advantages of endowment life insurance (ULI) and its most beneficial terms in his interview with LIFE INSURANCE.
Endowment insurance: the most favorable contract terms

Endowment insurance policies are profitable savings products that bring their owners up to 4.5% per annum in dollar terms. After the expiration of the policy, the client certainly receives the insurance benefit. Besides, insurers protect their clients from events impossible to predict, such as accident, disability, illness or death.

In order to determine which terms of insurance are lucrative, it is important to understand what factors form the policy cost and profitability. “Life insurance is a personal insurance service, as the insurance premium amount paid by the client when concluding an insurance agreement depends on many factors, including those concerning the insured client himself, for example, gender, client’s age, occupation, health status and lifestyle. Usually, the younger the client, the lower the risk of an insured event and, accordingly, the lower the rates, so the premium amount of the insurance policy will be lower,” explains the acting Chairman of Board ща Directors of Halyk-Life Andrey Dzheksembayev.

The insurance period is also important, and the longer it is, the greater the insured amount, and the lower the insurance premium amount. The reason for this is that the insurance company invests the client's funds, which allow it to earn return, the longer the investment period, the higher the investment return. “Knowing what factors are taken into account when determining the size of the insurance premium, a person should understand that the younger he is when he buys a life insurance policy, the lower the insurance premium amount throughout the entire insurance period will be, and the longer the insurance period, the lower the premiums. Be advised, it is more lucrative to buy a life insurance policy at a young age and for a longer period of insurance,” the interlocutor emphasizes.

An endowment life insurance contract can be concluded for a period of up to twenty years. The term of endowment life insurance contract depends on the goal set by the policyholder based on his needs. “For example, saving up for the child's higher education will take three to six years. It is also worth noting the high profitability of foreign exchange endowment insurance programs, the higher the term, the higher the rate. For instance, one of the highly demanded products of JSC Halyk-Life is Halyk-Kazyna. It is a universal life insurance program with indexation to the exchange rate, which means that after paying the insurance premium, the client's life is insured for the amount of savings, adjusted for calculated return in foreign currency at the exchange rate of the National Bank on the date of payment. At the end of the insurance period, the client receives back this accumulated amount in full, including the guaranteed return. The payment will also be in tenge at the rate on the date of the end of the contract,” concludes Andrey Dzheksembayev.

Another big perk of endowment life insurance is a tax concession. Thus, when paying an insurance premium, it is possible to adjust the income calculated for individual income tax within the 320-fold MCI under an endowment insurance agreement concluded for a period of three years or more.

Photos are from open sources.  

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