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A set of crucial points upon entering into the Retirement Annuity Agreement. Expert’s advice.

A choice of insurance company for entering into the Retirement Annuity Agreement is a high-impact decision, for making of which, it is necessary to take into account a number of crucial points. First of all, this is due to the fact that payments under the Retirement Annuity Agreements are the pensions and shall be paid for lifetime. Thus, the wrong choice of an insurance entity may lead to negative consequences in the future. First of all, it is necessary to pay attention to reliability and financial stability of the company within the process of an insurance entity choosing.
A set of crucial points upon entering into the Retirement Annuity Agreement. Expert’s advice.

Initially, the range of potential insurers shall be determined on the basis of availability of the license issued by the National Bank of the Republic of Kazakhstan for insurance activities in the field of “life insurance” under the annuity insurance class.

Additionally, it is necessary to verify compliance of the life insurance company with prudential regulation (standards set by the National Bank of the Republic of Kazakhstan and mandatory for compliance by insurance (reinsurance) entities). This information is available to the public domain (on the official website of the National Bank of the Republic of Kazakhstan).

You can analyze the indicators of the volume of assets, insurance reserves formed, the volume of collected insurance premiums and insurance benefits paid, the number of agreements executed, on this website, as well. Secondly, the important criteria for choosing of an insurance entity are the experience of the life insurance company on the insurance market, participants and founders (shareholders) of the company, their goodwill on the insurance market, the level of population’s trust in them, their long-term participation in the company.

Thirdly, an insurance entity must have branches in the capital, cities of national status and administrative centers of the regions according to the Act of the Republic of Kazakhstan “On retirement benefits in the Republic of Kazakhstan”. Therefore, it is necessary to find out information about availability of a branch in your region, and taking into account the fact that payments under the Retirement Annuity Agreements are of a long-term nature, it is necessary to clarify the location of the branch of the life insurance company for convenience of applying.

Fourthly, in order to make a weighted decision, having previously selected several insurance companies, it is necessary to apply to the branches and request calculations, a draft agreement and ask all the questions of interest. So, according to the Act of the Republic of Kazakhstan “On retirement benefits in the Republic of Kazakhstan”, a standard-form Retirement Annuity Agreement is drafted and approved by the authorized body, i.e. the National Bank of the Republic of Kazakhstan.

Therefore, life insurance companies must use a unified form of Retirement Annuity Agreement. At the same time, among the questions to be asked, it is necessary to clarify if there are the conditions available for the guarantee period and its maximum terms, the specific terms for insurance benefits payment, what deductions will be made from insurance benefits according to the laws, availability of allowances to deductions and what documents are required to prove them.

And finally, for the purpose of long-term cooperation and having quality services within the Retirement  Annuity Agreement, the feedback can be analyzed regarding the company, which it is planned to enter into the Retirement Annuity Agreement with. The best thing is if there are recommendations/ feedback from family members, friends, colleagues, who has used the services of life insurance companies.

Ayazhan Bekseitova

a member of the Board, “State Annuity Company” Life Insurance Company JSC

Source: http://www.gak.kz/news_detail?news_id=51

Photo is from the website: 50plus.ru

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