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How Kazakhstanis raise money for children's education

LS is discussing with professional participants how popular an educational accumulative insurance product with the state (SESS) is among Kazakhstanis.
How Kazakhstanis raise money for children's education

In the conversation with LS, the chairman of the board of LIC Freedom Life Azamat Yerdessov noted that as of April 1 of this year, 204 agreements were concluded under the Freedom University program within the SESS framework, and the average amount of savings reached almost 5 million tenge.

By region, Almaty (54) and Atyrau (48) lead in the number of agreements. Meanwhile, the minimum insurance amount is 22 thousand tenge, and the maximum is almost 40.9 million tenge.

Yerdessov emphasized that Kazakhstani parents became more actively interested in the product since its launch, as they were able to save up for their children’s higher education without putting a strain on the family budget.

“For this purpose, the adult determines the insurance period (from three years or more), the size of premium and the frequency of its payment (monthly/quarterly/semiannually/annually). Then the agreement with insurer is concluded, according to which the state premium is accrued for a period not exceeding 20 years,” explained the Freedom Life executive.

The program works like a deposit with a guaranteed annual effective rate of return of about 8%. The amount of savings during the insurance period grows annually due to government premium in the amount of 5% of the calculated amount, which includes paid premiums and investment return regulated by law.

According to LIC Eurasia, 4.8 million tenge on average are accumulated in favor of each future student. And the largest number of contracts also falls on Almaty and Atyrau.

The director of retail sales development department, Ramai Kurbangaliyev says that within the SESS framework, the largest amount of savings exceeds 19 million tenge, and the smallest is 300 thousand tenge.

“Compared to the same period last year, the number of contracts concluded has doubled. We have been working to improve the information system, and in the near future we will begin to intensively promote the product,” added Kurbangaliyev.

Meanwhile, LIC Nomad Life concluded more than 200 educational life insurance agreements. The main share fell on cities such as Almaty, Astana, Uralsk and Shymkent.

The average amount of savings reaches 1 million tenge, and the maximum amount of savings does not exceed 9 million tenge.

“There is still no stable demand for the product, since it is new and requires clarification and understanding of its benefits for customers,” they noted in Nomad Life.

Source: https://lsm.kz/kazahstancy-kopyat-na-vysshee-obrazovanie-detej

Photos are from open sources.

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