There are four types of life insurance:
Endowment (temporary) insurance
It is concluded for a certain period of time. You can be saving money for something important for 10 years, for example, your children’s higher education, and all this time your life will be insured. Once you have entered into a contract, you may have both or one of two following options:
- an insurance event has occurred: your beneficiaries (those whom you indicate in the contract) will be paid (on death risk);
- nothing happens to you before the end of the contract: you receive your savings (on longevity or surviving to a certain event risk).
You can choose the amount of contributions and payments yourself. The term is from 5 to 20 or more years. It is possible to conclude an agreement for a shorter period, but in this case, the return will be low, and the tariffs, on the contrary, will be high.
It is possible to even get whole life insurance; it will be indefinite. Premiums are paid periodically or in a lump sum. It is used as one of the ways of legacy transfer or as a way of financial support for relatives after the death of the insured person.
Voluntary pension insurance
Similar to endowment but there are two significant differences. First, expiration date is achievement of retirement age, and second, you can choose the period during which you (or someone else you choose) will receive an additional pension. Everything else is the same: you choose the size of your pension and pay regular contributions.
Retirement insurance options:
Life pension
You choose the period from which you start receiving additional pension. If something happens to you, the accumulated balance of pension will not expire and will be paid to the beneficiary, the one you appoint: husband, wife or other close relatives.
Term pension
You indicate a certain period when you want to receive an additional pension (for example, from 65 to 70 years).
What are extra conditions of retirement insurance?
They can be exempted from paying contributions upon the onset of disability groups 1 and 2. In this case, additional monthly payments may be assigned.
Accident insurance (one-time insurance payments for injury, death and disability only as a result of an accident).
However, all additional terms must be specified in the agreement separately.
Risk insurance
This type of insurance is similar to whole life insurance: in case of insurance event, a certain cash payment is paid. Risk insurance protects the insured person from various risks: in case of disability (certain group of disability), diagnosis of a serious illness, hospitalization, surgery, or injuries.
Another particular case of risk insurance is credit insurance. In this case, if a bank is listed as the beneficiary, the payment will be received not by you but by the bank where you take the loan. If something happens to you, your family will not have to pay for you.
This type of insurance allows get a lump sum of money. The amount of contributions is usually from 2 to 5% of insurance coverage but may vary depending on gender, health status, or age of the insured person.
Investment insurance
Accumulations in such insurance are divided into two parts:
- a guarantee part will ensure the return of your money if the situation on the stock market is unfavorable;
- an investment part can provide additional return.
This type of insurance seems to be particularly beneficial, however, one must also take into account the fact that it is up to each insurance company what exactly to include in the investment portfolio. Several offers are usually created for different strategies: aggressive (with the probability of higher return and greater risks) and conservative (risks and probable return are less). Read the contract carefully to make sure you are agreeing to it.
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