Customers have not immediately showed interest in this product. The mixed attitude towards endowment was initially caused by the fact that the product was considered complex, it was often offered to an untargeted segment, some clients confused it with another product - investment life insurance (ILI), and for some it was generally difficult to make contributions according to the approved schedule.
“A person’s life and health will be insured for the entire period of validity of the contract. Insurance benefit is paid in two cases: if the policy has expired or if an insured event occurs, - says expert Pavel Sigal. – In the first case, the company will return all contributed funds and add a guaranteed income, which in some cases, may turn out to be zero; all the details are usually indicated in the policy. In the second case, the company pays insurance settlement to the beneficiary or continues to make insurance premiums for them. This scheme is attractive for investment if all the requirements are met: the contribution period is quite long (5-30 years), and replenishments are regular.”
The number of those who makes savings is growing, including with the help of endowment programs, which provide the possibility of insurance coverage in case of unforeseen life circumstances.
Following the cycle of increasing the key rate by the Central Bank of the Russian Federation, the norms of guaranteed return of endowment programs are also changing. Thus, the guaranteed return ranges from 10.29% to 21.67% per annum on some endowment programs with a lump-sum premium; the longer the duration of the program, the more favorable the conditions will be. In general, the guaranteed return depends on the size of the lump sum premium, duration of the contract and risks included in the program.
Photos are from open sources.
