ru kz en

Universal life insurance is more beneficial than a deposit: income guarantee and financial cushion

How is the insurance market developing in Kazakhstan? Askhat Mukhamedov, the Head of Service for Regional Development and Customer Service of JSC Life Insurance Company “State Annuity Company”, told in his interview.
Universal life insurance is more beneficial than a deposit: income guarantee and financial cushion

-The market of voluntary life insurance is rather underdeveloped in our country. Only a small part of the population enters into life insurance or pension insurance contracts. What is the reason for that, and should we expect changes?

- Many people remember what happened to the banking and insurance systems after the collapse of the USSR. The population lost a lot of money, and this mistrust is still felt in society. The level of incomes of citizens also influences the insurance market development. We can see that it is growing, and more and more customers can afford to purchase an insurance policy. Also, the insurance legislation is constantly being modernized, many amendments are made, through which many controversial issues are regulated between the supervisory authority, the client and the insurance company, which undoubtedly increases the confidence in insurance companies. According to official statistics, the insurance market in our country is developing quite dynamically: the volume of the life insurance market in 2010 was a little over KZT1.5 billion; and only as of the 1st HY this year more than KZT22 billion were collected.

As for retirement annuity agreements, I would like to say that the pension system in Kazakhstan is quite young; the saving system has been in operation since 1998. At the moment, we see that the pension savings of the population are growing from year to year and I believe the number of retirement annuity agreements will grow in the future.

- Amendments and additions to some legislative acts on insurance and insurance activity have come into force in Kazakhstan. Which of these amendments do you consider relevant?

- First of all, changes are aimed at protecting the people’s interests when receiving insurance services. The amendments are also aimed at expanding the activities of the insurance ombudsman. The client of the insurance company can now apply to the insurance ombudsman for protection in case of disagreement with the amount of payment in any type of insurance. Besides, an additional guarantee of insurance payments for socially significant life insurance products was introduced. In particular, Insurance Payments Guarantee Fund provides for insurance payments on retirement annuities and annuities of workers who have lost their ability to work. The guarantee will be in force during the liquidation of the insurance company until all are transferred to another insurance company.

- By today, the line of life insurance products in Kazakhstan is standard. Are any innovative products in plan to be introduced?

- The insurance market is actively growing; insurance companies are developing new products depending on the market needs, for example, the universal life insurance programs tied to US dollar exchange rate or providing income from the investment activities of the insurance company.

- What is the difference between universal life insurance and a bank deposit? Does the policyholder receive an investment income in either case?

- Under the universal life insurance policy you accumulate money and by the end of the indemnity period you get an adjusted according to index capital and investment income. This is the same deposit, only with additional benefits. In case of insurance event (illness, disability, death), the bank will return the accumulated money with interest, and the insurer will additionally make an insurance payment equal to the amount specified in the policy. The client receives both income to his savings, and insurance coverage.

- It means a person simply receives an investment income by having a deposit. And by signing an accumulation insurance agreement, in addition to receiving an investment income, does the insurer guarantee a safety cushion for the client and his relatives in case of an insurance event?

- Unfortunately, a person is mortal, and sometimes his death is sudden. If, for example, a family has small children or a mortgage, then in the event of death of one of the spouses, the second will be struggling. Poverty awaits the family. The insurance policy covers these risks.


Photos per websites:,

read also
When life insurance companies refuse the claims on payments
When life insurance companies refuse the claims on payments

Sometimes insurance company refuses its client. What is the reason for refusal? Refus...

Expert: the cost of retirement annuities is justified
Expert: the cost of retirement annuities is justified

Life insurance companies are often accused of the high cost of services. This critici...

The most interesting materials of the site you have in the mail! Subscribe to the newsletter.

Submit your application