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Endowment insurance in Europe: 9 out of 10 families are insured

Often, one person has 2-3 policies with different protection systems and savings programs. 70% of the total volume of payments in Europe falls on Germany, Britain, France and Italy; these are the states with a highly developed insurance structure.
Endowment insurance in Europe: 9 out of 10 families are insured

Europeans, who spend about a quarter of their monthly salaries on insurance premiums, believe: "Though life is priceless, it does not mean that it should not be valued". Sometimes families conclude several insurance contracts. If a person has no life insurance policy, he is considered to be almost a bankrupt. After all, life insurance in Europe is not only the provision of relatives in the event of death, but also a way to save money for old age.

In the present world, an endowment insurance policy for the European is not only a financial guarantee, but also a way of saving money, an opportunity to create capital for a pension. Therefore, the share of endowment insurance is 90%, and only 10% is risk life insurance.

The financially literate population in Europe prefers it to bank deposits, since endowment insurance happens to be more profitable.

European legislation allows insurance companies to invest only in the accounts of large banks and in shares of the largest enterprises. The responsibility for the investment is borne by the insurance organization, which also has the guarantee of international reinsurance companies.

It turns out that, with a more reliable protection, they have the opportunity to increase capital no less than the bank deposits.

The governments of Belgium, Germany and France, support people in accumulation of pensions, however, the tendency to get separated from the state involvement in these savings is marked.  Trying to help the indigent, states are confident that able-bodied citizens must secure their own pension capitals.

Endowment insurance is not very different from the bank deposit. The insurance contract in this case is concluded for a fairly long period, as a rule, not less than 20 years. It is also possible to obtain insurance until a certain age. The amount of savings consists of money deposited and the accrued interest rate. When the insurance term is reached, the insured person can receive a lump sum or in parts, as a pension supplement. In the event of client’s death, the whole amount of money will be received by his relatives.

The benefits of endowment insurance policy include:

  • Over a long period, interest on the deposit turns into an impressive amount of money;
  • No need for pension insurance;
  • Financial support of relatives in case of family provider loss;
  • Accumulation of a significant amount of money by old age;

If you are planning to conclude a contract for endowment insurance, ask how successful the chosen insurance company is, because the amount of interest on the insurance policy depends on that.

Before entering into an insurance contract it is necessary to:

1) Think how much money you want to get by the end of the term of the insurance policy. Usually in Europe, this amount is determined based on the size of the desired planned pension raise.

2) Decide which form for obtaining insurance benefits is more acceptable for you: a lump sum or a monthly fixed amount.

3) Choose a convenient option for payment order, i.e.: monthly, quarterly, once a year and so on.

In Europe, endowment insurance provides financial stability in old age. Therefore, the population of developed countries chooses it to protect themselves from financial problems in old age. The basis for this choice is as follows:

- Endowment insurance performs a number of functions; it is a long-term investment, pension insurance and a guarantee of insurance payments to relatives in case of death of the supporter of the family;

- Receiving a substantial amount of money by the time of retirement by making monthly insignificant deductions;

- Absence of risks, as insurance companies guarantee payment of the agreed amount of money, and no matter successful or unsuccessful investments of the insurer are, the affect only the accrued interest.

Statistics confirm the successful development of life insurance in Europe. Thus, according to the publication of the Die deutsche Lebensversicherung in Zahlen 2017 (data on life insurance in Germany as of 2017), published by the German Union of Insurers, in 2016 German life insurance companies had a breakthrough in terms of investment of 1 trillion euros, made at the expense of their clients' funds.

This translates into the investment portfolio growth by 4.3%, up to 923 billion euros (while 885 billion euros as of previous year). In addition, 102 billion euros were invested in investment life insurance with no investment income guarantee, unit-linked, (5.9% increase up to 96 billion euros as of previous year).

In 2016, 89.3 million contracts were concluded with life insurers and pension funds. The share of pension insurance accounts for a significant amount of approximately 40 million contracts concluded. "This shows that the insurance industry makes a big contribution to the expansion of supplementary pensions", says a representative of the German Union of Insurers.

The investment income received by life insurers and pension funds remained at a very high level in 2016 (90.8 billion euros). One-time bonuses make 26.4 billion euros in this amount. Regular premiums slightly decreased by 0.3%. Investment bonuses paid to policyholders grew by 7.1% to EUR 88.9 billion. All this allowed German life insurers to earn more than 244 million euros every day for their customers in 2016.

Sources: http://invest-insurance.ru/nakopitelnoe-strahovanie-v-evrope/

http://incead.com/articles/the-subtleties-of-the-market/strakhovanie_zhizni_v_evrope/

http://insurancebiz.org/discuss/analysis/detail.php?ID=7220

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