“I conclude a life insurance policy every year,” says Saule Yntykbayeva on her Facebook page. - I am a fatalist. I have a term insurance. And there is also endowment. Imagine, you have entered into a life insurance contract for 20 years. You pay the insurance company 100 000 tenge every year. 20 years later, having received 2,000,000 tenge and interest, you can spend this money for children’s education or other purposes. Having signed a term insurance contract, you pay 15,000 tenge every year. 20 years later you will not get anything. But in case of insurance event, you or your family will be paid 2,000,000 tenge, if such an insurance amount is specified in the contract.
What are the guarantees that insurance companies will pay in case of insurance event?
The National Bank of Kazakhstan is a member of the International Association of Insurance Supervisors (IAIS). This means that the National Bank carefully controls the activities of insurance companies. By law, each insurance company is obliged to cover its risks with another insurance company, most often it is a foreign insurance company with a high international rating. One insurer is reinsured with the help of another insurer. Thus, the amount of coverage under the programs of term and accumulative insurance is guaranteed to be paid to all insured.
Insurance for young people
Usually, young people rarely think about life insurance, and, however, it may help to save money for various purposes and protect interests in case of injury. The younger you are at the life insurance policy conclusion, the lower the contributions will be and the greater the amount you will receive upon the contract expiration.
The most negative scenario
If the insured passed, his heirs would receive the entire insurance amount within 30 days, no matter how many contributions he had made. The contract also provides for additional insurance coverage in the event of, for example, injury as a result of an accident. In this case, the insurance payment will be recalculated as a percentage of the final amount.
According to the new law amendments, universal life insurance policies have been equated to tax burden deposits. And therefore, no additional tax payments to be required when receiving income from the policy.
Besides, your money is protected by confidentiality of deposits and therefore, not subject to publicity. It cannot be confiscated. Universal life insurance premiums are also protected from claims of third parties in a property dispute, they are not subject to arrest, division between spouses, to declare. Moreover, you accumulate and multiply this money for specific purposes. Your savings are tax free.
The money and interest invested for the entire period in case of adverse conditions, including your decease, can be divided in advance among your heirs, whom you designate yourself.
In addition, many life insurance companies now offer the possibility of obtaining a tenge loan on the security of a policy at a low rate.
One more thing, in addition to a good source of investment, you also get life insurance coverage, which is valid 24/7 worldwide. And it begins to act from the first day as of policy signing date.
It is important to remember:
Universal life insurance involves long-term investments. In case you decide to terminate the contract early, you will be able to return your invested money after one year, and get a profit after three years of the contract.
The profitability of universal life insurance is 3-5%. Now the Kazakhstani life insurance market has products with a yield in US dollars, even higher than dollar deposits. So, if the foreign currency deposit rate in banks is on average 0.5-1%, the life insurance product rate is up to 3.26%. The term of the contract is 3 years or more. The rate is fixed for the entire duration of the contract. The longer the period, the higher the yield on the instrument. No changes in the financial market will affect the yield guaranteed by the insurance policy.
Thus, universal life insurance is suitable as a financial tool for all people thinking about their future and the importance of financial planning. It will help you to save money for an important event or simply to create additional retirement income, at the same time protecting your family from tragic accidents.
Photos are from open sources.