The life insurance industry is the most stable both in Kazakhstan and worldwide. LICs have survived the mortgage crisis, the 2015 currency crisis and been ready for the blows of COVID-19. The number of insurance events has sharply increased during the pandemic in Nomad Life, for example, in endowment insurance it grew by 200%. The maximum payment made by the company to the family of one of the deceased from COVID was 81 million tenge. Halyk-Life also noted an increase in requests by 83%. Kairat Chegebayev, the Board Chairman of LIC Nomad Life, emphasizes that the pandemic is in full swing and a fuller picture will be clear later: “These are only reported cases, but as it often happens, they are announced with a delay, since people at such a time do not have time to contact the insurance company. Sometimes, relatives are unaware of the insurance policy. Going through the documents and having found the insurance policy, they turn to us."
The main social function of insurance is a financial security of the client and his relatives from the consequences of unforeseen circumstances for the entire contract duration. “There has been a tendency recently that people are beginning to treat their lives and well-being of their families and children more reasonably without shifting this responsibility onto others, - says Oksana Radchenko, the Board Chairman of Halyk-Life. - Universal life insurance is gaining popularity, because such an investment is always repayable. It allows you to save money for any purpose with insurance coverage for the entire period of savings."
LICs are now responsible for payments to relatives. “We recommend our potential clients life insurance for any reason, it has a wide coverage, including death as a result of coronavirus or other diseases. The social component of the LICs’ activity is to help people and the economy in difficult times. It does not necessarily mean now, it can be done at a quieter time, as hundreds of thousands of our customers have already done,” Kairat Chegebayev believes.
Pandemic in full swing
The dire situation caused by the spread of COVID-19 among the world's population, which has had a devastating impact on human well-being, the viability of enterprises and economic resilience, has once again emphasized the importance of a stable and developed insurance sector. “When insurers improve business resilience and productivity, other sectors of the economy can minimize losses and grow. Plus, insurance medicine can be a way out in this difficult situation, when patients cannot always count on full-fledged free medical care and free medicaments,” emphasizes Gulzhan Dzhaksymbetova, the Chairman of the Board of Centras Kommesk Life.
If we examine the situation from the consumers’ point of view, there are supposed to be relevant insurance products on the market that can financially secure the client in case of an insured event, as well as preserve and increase the investments made in the insurance program. “On the part of LIC, it is necessary to quickly adapt to new circumstances, develop and introduce new technologies for consumers’ convenience, time saving and financial benefits,” explains Azamat Yerdessov, the Board Chairman of Freedom Finance Life.
Global challenges and the emergence of new risks have prompted insurers to create new products that provide insurance coverage in the event of a pandemic.
“In fact, the products of LICs have extensive number of insurance coverage, one of which covers the risk of death from any cause whether it is illness or accident. It is better, however, to get insured not against a specific disease, but purchase products that include acute respiratory viral infections, including those caused by coronaviruses, as well as especially dangerous critical diseases,” the Centras Kommesk Life executive recommends.
How to minimize the cost of insurance
An individual approach is used when determining the cost of an insurance policy, because the risk assessment in relation to the client is carried out taking into account many factors that concern him personally. "The gender, age, type of professional activity, state of health and even lifestyle of the client are taken into account," the Board Chairman of Halyk-Life explains. According to insurers, if the client's work is dangerous or he is engaged in extreme sports, such circumstances, on the contrary, may affect the policy cost upwards. “Therefore, the younger the person, the better his health coupled with a healthy lifestyle, the lower the amount of insurance premiums he can count on. I would advise buying a life insurance policy at a young age and for a longer insurance term,” says Oksana Radchenko.
Many life and health insurance programs abroad include a checkup option; health assessments are also carried out in Kazakhstan. “This health assessment is made on the basis of the client's application form. The insured person can be referred for medical examination if necessary. If you intend to get insured, we recommend you not to withhold information about your health status and existing diseases. If it turns out that important information is hidden, the insurance company may refuse to pay,” says Gulzhan Dzhaksymbetova.
How much will be paid and how much to pay
“It is believed that the payout amount upon the insurance event occurrence should be at least three annual incomes. It is also considered impractical to insure your life for an amount exceeding ten annual incomes. For example, a person who earns 300,000 tenge per month will be recommended to insure his life for at least 10-11 million tenge,” explains the Board Chairman of LIC Nomad Life.
The Freedom Finance Life executive reminds that one of the main advantages of universal life insurance is the ability to pay insurance premiums monthly for several years: “The clients usually indicate accumulation periods from three years for policies with indexation to the dollar to 10-15 years for policies in tenge with participation in profits. The payment under endowment program can be made once a month, quarter, six months, year, or in a lump sum. The contribution amount can be from 5 thousand tenge."
When choosing endowment, you should send at least a sixth of your income to your LIC account. By doing so the insured not only increases their own capital, but also take care of their loved ones. “Both the insured and his relatives can be beneficiaries, depending on the insured event. Upon hospitalization, the payment by the insurance company is made to the person who bought insurance. In case of the insured’s death the payments are received by people indicated in the insurance contract as heirs,” concluded Azamat Yerdessov.
