In the course of the study, the experts have determined that the annual growth in average wages has been 15% over the past five years and inflation over the same period has averaged 10% in Kazakhstan.
According to the Bureau of National Statistics of the Republic of Kazakhstan, as of June 2023, prices for food products have increased by 14.6%, for non-food products - by 15.8%, for paid services - by 13.3% over the year. The average wages grew by 27% compared to last year.
In order for people with average earnings to have the opportunity to make large purchases, pay for their children's higher education or afford vacation abroad, there are a number of effective financial instruments. The most popular are bank deposits, investing in securities and endowment life insurance. With their help, it is possible to protect the capital from devaluation and inflation, and also use it as an extra income.
Bank deposits are a suitable tool for short-term investments ranging from a few months to 3 years. They can also be used as a reserve capital provided that the funds can be withdrawn without loss of interest. The conditions of deposits in many banks are the same, and the annual rates on them are 13% on average. Deposits up to 10 million tenge with accrued interest are protected by the Kazakhstan Deposit Insurance Fund (KDIF).
Securities (stock and bonds) are also of interest to Kazakhstani investors. Shares of large global and domestic companies allow profit from the growth of their value and dividends. Bonds give a fixed income. The study by Freedom Life analysts showed that the most active age group involved in investing consisted of people aged 32 to 45 years.
Universal life insurance (ULI) is a combination of insurance and investment. When concluding an agreement under endowment program, the client can insure their health and life against unforeseen situations, as well as accumulate money with a high annual remuneration rate. For example, under the Freedom Capital program, it reaches 4% in dollars and 2.2% in euros.
And with the help of the Freedom University program within the framework of the state educational system (SESS), it is possible to save up for higher education for your child with a guaranteed annual effective rate of 8%. The sum of savings increases annually during the insurance period by the amount of the state premium equal to 5% of the calculated amount, which includes paid premiums and investment return regulated by law. The main perk of such a program is that the insurance benefit is paid in full, regardless of the insured’s longevity, that is, the child will be able to study at the chosen university in any case.
Endowment life insurance programs are designed for a long-term period, usually from 3 to 10 years. There are tax benefits and immunity of investment deposit when concluding an endowment agreement. Insurance premiums of company's clients are 100% protected from confiscation and seizure and are not subject to division in property disputes.
It is worth considering the active digitalization of the insurance market and the introduction of online life insurance programs. To conclude an insurance contract, it is now enough to go to the insurer's website, select the desired program and conclude an online contract in five minutes using a mobile application or computer. Online insurance is not only a number of programs, under which a policy can be issued. It is also possible to claim an insured event in the personal account on the LIC website, send copies of necessary documents and receive insurance benefit online.
Photos are from open sources.
