When a person chooses a life insurance company and enters into a retirement annuity agreement with it, the UAPF transfers the savings to the LIC account. The sufficiency threshold is set on the basis of special actuarial calculations with the condition that the insurance company is able to create reserves for making lifelong payments to a person, taking into account the annual indexation. “The minimum monthly annuity payments today must be at least 70% of the subsistence minimum. In order to ensure the monthly payments, the minimum amount for transferring funds from the UAPF to the LIC is calculated,” said the speaker.
Suppose a 55-year-old man has 15 million tenge accumulated in the UAPF, he enters into a retirement annuity agreement with the LIC. The monthly payment in the first year will be 53,341 tenge. A year later it will be increased by 5% to 56,008 tenge; another year later it will be 58 808 tenge. In 20 years the monthly payment will be equal to 141,530 tenge, and by this time the total amount of payments will already exceed 22 million tenge.
“In other words, a retirement annuity guarantees the owner protection against investment risks, all these risks are assumed by insurers. In case the person stays in the UAPF, the investment risks fall on him,” Ramay Kurbangaliyev clarified.
Nomad Life contracts have the possibility to enter conditions for a guaranteed period (guaranteed period is a time period, during which payments are made, regardless of whether the client is alive or not). If the annuity owner dies, the payments will be sent to the heirs until the end of the guaranteed period.
“A retirement annuity gives a person the right to receive payments from three following sources upon reaching old age: basic pension (length of service until 1998), annuity payments by the LIC and payments from the UAPF formed after the conclusion of the retirement annuity agreement until the moment of pension,” concluded the sales and regional development director of JSC LIC Nomad Life”.
By concluding a retirement annuity agreement, the UAPF depositor transfers his pension savings in the form of an insurance premium to a life insurance company receiving the right to life payments from the LIC in return. According to local legislation, a retirement annuity agreement can be terminated only if its redemption amount is transferred to another insurance company, after a person concludes an agreement with it.
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