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Foreign currency insurance pushes aside dollar deposits

Now people in Kazakhstan can earn three times more on investments in dollars
Foreign currency insurance pushes aside dollar deposits

Every year the issue of wise management of family budget and investing accordingly, are growing more urgent. Some people in Kazakhstan prefer to invest their money in securities. But you should keep in mind that in order to form an optimal investment stock portfolio, according to analysts, you need to have at least 1-2 million Tenge. Usually, only in this case some securities cheapening will be leveled by value appreciation of others. It is necessary, however, to remember about additional expenses, for example, expenses for broker commission which will arise at investment.

It should also be considered that practically any news can become a cause of even the world giants’ shares collapse. So, in late March, the shares of the largest online retailer Amazon fell by almost 9% in two days. As a result of capitalization, the company sank by $66 billion. The fall began on March 27, when Axios periodical reported that the US president was thinking about opening an anti-monopoly or tax investigation against Amazon. An April joke of Elon Mask came with a high price tag for Tesla. Shares of the electric vehicle manufacturer fell by 5.1% in one night.

Nursulu Alpiyeva, Branch Manager of JSC "Life Insurance Company "NOMAD LIFE", told about all the advantages of the currency policy in comparison with dollar deposits. Let us examine the deposits first.

Currency policy rates are higher than deposit rates

Deposits are the more conservative tool for fund saving and accumulation.

The advantage of deposits is a guaranteed income, which is fixed for the whole contract term. Besides, you can establish a deposit even with only 1 thousand Tenge. The last three years there has been a steady trend of reducing the currency deposit interest rates. Since 2016, the yield on deposits in dollars has decreased from 3% to 1%. According to the National Bank, as of beginning of the year the yield on fixed-term foreign currency deposits has decreased by 0.7 percent, in average. If in 2016 the average rates for such deposits were 2.9%, in 2017 they sank to 2.2%. Now the market yield on dollar deposits does not exceed 1%. On euro deposits, many banks do not accrue any compensation at all.

However, recently a new currency financial product hit the insurance market. It guarantees profit several times higher than that offered by the banks, the foreign currency life policy "Nomad Gold", which is offered by JSC LIC "NOMAD LIFE". The yield on this product reaches 3.26%, which is three times higher than the rate offered by banks on dollar deposits. The amount is annually capitalized.

You need 1 thousand dollars to open the program. If you invest even larger amount in the policy, the income will grow significantly upon the contract expiry.

By the way, the funded policy is valid for a period of 3-10 years. The annual effective rate depends directly on the period: the higher the period, the higher the yield. On conclusion of a contract for three years, the fixed annual rate will be 2.3%, for 10 years - 3.26%. However, no matter what changes occur in the currency market, the rate will not change.

In many banks, on the contrary, the longer the term is, the lower the deposit rates. It is necessary to take into account that the deposit term does not exceed two years in most banks. Thus, the currency risks that the banks are less willing to take on themselves, are overlapped, when it comes to deposits.

Having a policy of "Nomad Gold", with 30 thousand dollar allocation for 5 years, the return on investment insurance will be 4,435 dollars, for 10 years – 11,283 dollars.

Unshakable Guarantees

When placing large amounts in an insurance company, depositors, of course, raise the question of their money safety. However, the fears that the insurer may not fulfill its obligations are groundless.

"First of all, life insurance companies create insurance reserves, intended exclusively for insurance event payments. Due to this, insurers always, at any time, have funds available to cover all their obligations. Thus, insurance companies form reserves for each contract", explained Nursulu Alpiyeva, Branch Manager of JSC LIC "NOMAD LIFE".

Secondly, it is necessary to take into account that all insurers are reinsuring their risks. "For example, JSC LIC “NOMAD LIFE” transfers some of its risks to the world's largest European reinsurance company with S&P rating "AA-". Its gross amount of insurance premiums reaches about 17 billion euros", Nursulu Alpiyeva noted.

The significant advantage of endowment insurance is that the benefits can be received both: upon or before the contract expiry, in case the customer dies.

Even if the insured person passes away before the insurance period ends, he will be paid the entire insured amount, including investment income. For example, if a person has concluded an insurance contract for 10 years, investing 30 thousand dollars, and something happens to him in 2 years, then the insurance company will pay $30 thousand plus investment income for the whole period of 10 years, $41,283 total. And it does not matter, if the person died in a month or 2 years after the conclusion of the contract, he will be paid the entire amount.

Besides, it must be taken into account that the funds placed by the client in Nomad Gold in accordance with the law requirements are not the client’s property, but the obligations of the insurance company to him; therefore during this period they cannot be included in the list of recoverable property and are not subject to declaration as his property.

Invest wisely; increase your incomes together with JSC LIC "NOMAD LIFE".

More information about the product: http://zolotonomadov.kz/, call-center - 3260 (call from mobile is free).

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