Universal insurance consists of two parts:
Annual fee: this parameter has not changed, and the client needs to deposit a certain amount every year as well,
and security deposit, a cumulative part, which is the key differentiator of this product.
The point is when concluding an agreement with the insurer, the client undertakes to pay the agreed amount. His premiums are initially higher than those that would have been with conventional insurance, and the surplus is exactly the same depository.
At some point, the insured is confronted with some difficulties as job loss, new expenditures or illness, and he is unable to pay contributions in full. In this case, a partial or full payment is made from the deposit, and the policy itself is not canceled but continues to work as long as there are funds in the saving part. If the client decides to terminate the agreement with the insurer, the cumulative part is paid to him in full, that is, there are no financial losses.
It would seem an ideal scheme. What else can be added to it, but competent financial management does not tolerate “dead savings”. Money has to work and multiply, and insurance companies give it that opportunity.
Deposit funds are invested by insurers, which gives additional income to both the company and person insured in it. In some cases, a fixed interest rate similar to a bank deposit is set, that is, the amount invested by us increases annually. The investment conditions for the client are as transparent as possible, and in some cases, he even gets the opportunity to independently choose the direction of investment in order to increase interest charges.
Photos are from open sources.