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How to insure your savings?

You can get passive income using various financial instruments. The official website of the Agency of the Republic of Kazakhstan for regulation and development of the financial market Fingramota.kz talks about various financial instruments, about endowment life insurance in particular.
How to insure your savings?

Thus, endowment life insurance can be attributed to a small source of passive income, usually in the amount of 3-5% per annum. Its main difference from the deposit is that along with the accumulation you have the opportunity to insure your life and health. According to the insurance contract, the coverage amount is paid in case of significant harm to health or death of a person. Therefore, such an agreement should be concluded in order to provide for all possible risks and provide the family financially in the event of the loss of the main breadwinner.

Since the insurance contract is usually concluded for a long period, an average of 10 years, the client also receives the accumulated amount and remuneration after this time. Thus, you can accumulate the necessary amount for a certain event, for example, a wedding, and in addition, get insurance protection against adverse events with health and life. Importantly, these deposits are not declared and are not subject to confiscation.

Insurance premiums can be paid monthly, quarterly, semi-annually, yearly or at a time. There are now several life insurance companies operating on the market that have a state license. Before choosing a product, you should get acquainted with the suitable options and conditions from at least several companies and choose the most beneficial one for you.

Investment in education

The best investment is an investment in education. According to the Law of the Republic of Kazakhstan “On amendments and additions to certain legislative acts of the Republic of Kazakhstan on regulation and development of the insurance market and the securities market”, signed by the Head of State on July 12, 2022, life insurance companies have the opportunity to participate in the State Education Savings System (SESS), which provides for an annual premium from the state.

Unlike the AQYL educational deposit, the product offered by insurance companies includes insurance coverage. This means that in the event of a client's death or a disability of group I or II, the insurance company will still pay the full amount for education. Besides, a distinctive feature of the insurance product is that it does not have a limit on the guarantee amount, because AQYL is guaranteed by the Kazakhstan Deposit Guarantee Fund for a maximum amount of 10 million tenge. When purchasing an insurance product, a client can count on the yield offered by a life insurance company, premium from the state (5% or 7%), as well as insurance dividends if the product provides for the option of participating in the company's profits. It is also important to take into account that premiums under the endowment agreement are exempt from taxation.

Thus, when investing in child’s education, the parent has an alternative opportunity to save money for education with insurance coverage and security of savings.

The level of investor's income will depend both on his choice of a particular financial instrument, as well as his willingness to take risks, and goals of investments. So, if the task is simply to accumulate and save money, then less risky instruments are chosen, but they usually have a low level of profit, and vice versa. In any case, no one in the financial market guarantees this or that level of return, except for scammers. Therefore, when choosing a financial instrument for generating passive income, attention and diligence should be exercised.

Photos are from open sources.

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