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How will insurance policy help paying for Kazakhstani children’s education at the university?

Insurance policy is usually perceived as a tool to protect against monetary expenses. However, it can also help in accumulating large sums of money. Read more about the features of this financial instrument in the material by NUR.KZ.
How will insurance policy help paying for Kazakhstani children’s education at the university?

Legislative amendments allowing insurance organizations to participate in the State Educational Savings System (SESS) came into force on September 12, 2022. Only second-tier banks got to participate in it earlier. 22,000 of educational deposits have been opened in them to date for a total amount of about 33.5 billion tenge. These are bank deposits, which, in addition to the usual remuneration, also receive a state premium. As a result, one can only spend savings on education.

With new amendments, according to the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market, Kazakhstanis can use a voluntary insurance policy within the SESS. This is a voluntary insurance tool that can help you save up for your children's education and protect yourself from risks.

How to save with the policy?

Unlike a deposit, an endowment insurance contract has some advantages, such as: rate of return (from 8% to 10%), which is guaranteed for the entire duration of the insurance contract, unlike a deposit, the rate of which can change;

amount guarantee: the Insurance Payments Guarantee Fund covers the full accumulated amount, while the deposit guarantee reaches a maximum of 20 million tenge;

risk protection: in the event of a parent's disability or death, the full cost of education is paid regardless of the accumulated amount.

“By signing an educational accumulative life insurance agreement within the SESS framework, parents will be able to save up for their children’s education, receiving, in addition to the investment return accrued by the insurance organization, a state premium in the amount of 5% to 7% per annum,” the financial regulator reports.

Before drawing up this agreement, one should consider the details of this financial instrument.

It should be noted that the insurance contract also imposes certain obligations on its participant. For example, unlike a deposit, one will have to regularly deposit fixed amounts of money into insurance account. Delays can lead to the agreement termination and loss of part of savings and remuneration. It will also be impossible to withdraw money quickly and without loss in emergency cases, as can be done with certain types of bank deposits, that is, there is no investment mobility. Therefore, such a tool requires a responsible approach and careful study of the contract terms.

It should be understood that it is aimed at the long term and involves the constant saving of funds.

Source: https://www.nur.kz/nurfin/insurance/2005116-kak-strahovka-pomozhet-oplatit-obuchenie-kazahstanskih-detey-v-universitete/

Photos are from open sources.

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