Investment life insurance is a product that combines life insurance and a financial instrument that allows get income by investing money in various financial assets (bonds or stocks). “The person trusts the insurance company to which he buys a policy, investing in the stock markets. The main goal is insurance life and capital accumulation for various long-term life goals: education, pension savings, purchase of real estate and more,” says the Board Chairman of LIC Nomad Life Kairat Chegebayev.
According to the current legislation, settlements can be made in national currency – tenge, but the terms of the unit linked agreement can be selected within the framework of the investment strategy, including dollar. “This product may be of interest to those people who want to earn more than on a bank deposit, but at the same time, do not have special knowledge and a sufficient amount of free time for a quality fund management,” says the Halyk Life managing director Vitaly Lyubimov.
The client's investments are divided into two parts: insurance and investment. The insurance part is aimed at insurance and invested in reliable financial instruments, for example, government securities, and the insurance company guarantees a certain rate of return on this part. The investment part is sent to the portfolio chosen by the client.
Insurers offer many strategies, and the client determines the risk/return ratio most comfortable for him. “Let me explain by giving you example of our product. Nomad Life guarantees return on endowment life insurance at the level of 2.6% -3.41% depending on terms of the policy. The profitability of the investment component depends on the investment portfolios chosen by the client. For example, the average gross return on the portfolio of “100 largest IPO companies in the United States” over 15 years has made 14.53%, minus insurer costs", says the Board Chairman of LIC Nomad Life.
The profitability under investment life insurance programs solely depends on those investment instruments that have been selected by the client. “The higher the risk of an investment strategy, the hypothetically possible higher the profitability of an investment portfolio, but the risk of losses is also increasing,” emphasizes Vitaly Lyubimov.
According to the legislation, information on the amount of accumulated funds, contributions and other contract conditions are not subject to publicity. Besides, during the insurance period, the client's funds are not subject to arrest and are protected from claims of third parties in a property dispute. “Purchase of unit-linked policy entails two important aspects: creating savings and providing financial security in case of unforeseen circumstances. But there is one more advantage: investment in unit linked is deducted from taxable income, which gives the possibility of obtaining additional benefits,” says the Board Chairman of LIC Centras Kommesk Life Gulzhan Dzhaksymbetova.
A life insurance contract implies assigning a beneficiary. Therefore, the capital owner can give his wealth directly to heirs. Thus, hereditary disputes are completely excluded, since the assets are directly transferred to the desired heirs.
“Unit-linked program is great for accumulating and increasing capital for both experienced investors and newcomers with financial goals for the future", concludes Gulzhan Dzhaksymbetova.