The modern life of society is full of risks and all kinds of adverse situations. Avoiding all of them is unrealistic, even observing all possible safety rules, counting things forward many steps, and carefully choosing actions. Many situations can undermine the well-being of a person and his family, lead to bankruptcy, cause losses and losses. To solve these problems, there are several financial instruments, among which cumulative life insurance. This article discusses in detail the essence of the concept, features and goals of registration, the content of the contract, as well as organizations that provide this service.
Insurance as a term
All people strive to avoid adverse events. Naturally, it is impossible to completely protect oneself, but you can smooth out the “blow” by providing yourself with help when certain events occur. For this, an insurance contract is concluded between the insured and the insurer. Its essence is that the organization providing this service, upon the occurrence of a specified incident, pays the insured a certain amount. Thus, he has the opportunity to solve the problems that have arisen, without losing any time, effort or money. For the provision of services to the insurer, an insurance premium is paid. The situation may not happen, but the prize does not return. Due to these payments, a cash fund is formed from which the organization pays refunds to its customers. Naturally, the insurer also receives income from this fund.
Place of insurance in the life of society
Life insurance, health, property and even the possibility of certain events in the financial services market have existed for a very long time. The use of these products by financial institutions is quite common and continues to gain popularity. Some types of insurance have become mandatory. For example, compulsory health insurance and motor third party liability. When traveling, tours and excursions over long distances using a variety of vehicles (airplanes, buses, trains), the ticket price also includes life and health insurance for the passenger. When applying for a loan, mortgage, loan, banks often require borrowers to take out insurance. The latter may not be strictly required by law, however, in case of refusal of insurance, financial institutions in most cases refuse to issue a contract to clients.
Many businessmen actively use the services of insurance companies to protect their business from the negative consequences of the economic crisis, dubious transactions, ungodly partners. The amount of the insurance premium seems a much better option than the loss of all available assets due to force majeure.
Who provides these services
Not every organization can provide insurance services. The state has a certain number of requirements for such companies: the legal form, the number of shareholders, the size of the authorized and reserve capital. Like banks, insurers are closely monitored for transactions and financial transactions. If a substantial part of them will be recognized as doubtful, the organization will have to say goodbye to a license for this type of activity. Due to the high requirements for financial security, most often the range of insurance products is offered by large banks and financial holdings. It is much easier for them to obtain permission for such activities. It’s very difficult to come into this sphere just like that.
About life insurance
One of the most common insurance services is life and health insurance. You can insure yourself, a loved one, a child. The employer can insure his employee in the same way. The essence of this procedure is that upon the occurrence of an insured event (death of the insured, serious injury, disability, illness, accident and other incidents), the client will receive a refund. This person is indicated in the contract. So, the insured himself or his family members (in case of death) may act as the insured person. In the contract, you can also register another person who is not associated with the insured family ties.
The practice of using such services is most popular in Europe and the USA, however, in our country it is gradually gaining momentum. Life insurance, health insurance, and disability insurance are especially relevant for families in which only one person is the breadwinner, or receives the highest salary.
Where used (mandatory and optional life insurance)
Life and health insurance may be compulsory and voluntary. Some insurance programs are provided by the state and are clearly regulated by it. So, for compulsory health insurance are responsible structures such as FFOMS and TFOMS (federal and territorial funds of compulsory medical insurance). Some professions require such insurance, as they are particularly dangerous activities with a high risk of injuries of varying degrees.
In addition to compulsory insurance, there are voluntary programs. For example, cumulative life insurance. No one has the right to oblige a citizen to use this financial instrument. But every day more and more people consciously choose life insurance, ensuring the well-being of their loved ones in the event of an accident.
What does cumulative life insurance mean?
In the insurance market there are a lot of products for every "taste" and wallet. One of them is funded life insurance. This program appeared relatively recently, but has already gained momentum and even got its regular customers. Its essence lies in the repayment of most of the payments to the insured. Thus, the client is not only insured against an accident, but also accumulates funds through regular deductions to the insurance company. This approach is beneficial to both parties to the funded life insurance contract. The organization still receives its insurance premium, and the client is confident in the future of his family, and also receives the accumulated amount stipulated in it at the end of the contract.
Due to what is the accumulation of funds
Endowment life insurance programs are a rather complicated financial instrument with many nuances that are not always accessible to an ordinary person, far from banking and insurance structures. The amount that the client will receive upon completion of the contract is made up of several components. The majority of it is paid by the insured independently (to an account opened for this purpose). Payments are made in equal parts, the time frame is limited by the term of the contract. Usually, payments are made quarterly. Of the amounts paid, an organization commission is charged for the service provided.
The remaining cash is not just that. The company uses them, grants loans, invests, and uses them in economic activities. Depending on the results of financial transactions, at the end of each reporting period, interest is accrued on invested funds. It is due to these percentages that the amount accumulates and increases.
Contract structure
Cumulative life insurance conditions are a detail that should not be overlooked. The general structure of contracts in different organizations may be similar, but each of them has its own nuances. In some companies, conditions may be more beneficial. It is worth going around several providers of this type of service before deciding on the final choice.
A standard accumulative life insurance contract for insurance companies contains several components: an insurance policy and its annexes. Typically, applications contain related information or additional services. Cumulative life insurance Rosgosstrakh is executed, for example, with a life insurance policy (aka contract), annex No. 1, which describes the selected program, and annex No. 2, containing a table of redemption amounts for the duration of the agreement.
Content of the contract
To maximize the coverage of possible events, the most complete reflection of its essence, and in order to protect the parties from each other’s misconduct, the insurance contract or policy, as well as its annexes should contain detailed information about a number of parameters. Insurance companies include the following data in the accumulative life insurance contract:
- Data of the policyholder, insured person, beneficiary. It reflects both the specific data of the indicated persons, and general provisions, who can act in their role.
- Insured events and risks, as well as the size of payments upon their occurrence.
- The term of the contract, after which the client receives the accumulated amount.
- Terms of payment of insurance premiums.
- Responsibility of the parties to the contract.
- The possibility of amending or supplementing the terms of the contract.
- Participation in investment income.
- Terms of early termination of the contract.
- Other conditions made by agreement of the parties.
Endowment life insurance: company rating
There are a lot of companies providing such services. Naturally, people prefer to contact the most reliable. When making funded life insurance, the rating of companies often has a decisive role. Different sites, in surveys and statistical studies, may provide different sequence options in terms of popularity. But in most cases, the leaders of all ratings occupy the first positions, only slightly fluctuating along the lines. If you measure the popularity of programs by the number of insurance premiums collected, you can make the following list of ten leaders:
- "Sberbank life insurance."
- "RESO-Guarantee".
- VTB Insurance.
- "ALFA Insurance".
- "VSK".
- Ingosstrakh.
- SOGAZ.
- Alpha Insurance-Life.
- "CSG Life".
- Rosgosstrakh (Insurance Company PJSC).
Pitfalls and reviews
When drawing up a contract of this kind, it is worth paying attention to a number of details. For example, how is the calculation of accumulative life insurance in the event of a preliminary termination of the contract. Usually, if the client has paid less than 8 insurance premiums, no savings are issued. Only from 3 years of validity of the contract can you count on some kind of payment. At the same time, it will be several times lower than the funds contributed during this period.
It is also worth noting that some life insurance contracts do not include insured events related to injuries. In this case, an early payment can be made in favor of the client only in case of death of the insured. If you expect to include injuries and other accidents in the contract, you will have to conclude an additional agreement or annex to the policy. In this situation, the size of the insurance premium paid to the insurer increases.
As for the opinions of people regarding the service, the reviews on funded life insurance are quite different in spectrum - from definitely positive to categorically negative. The fact is that you should not sign this agreement if there is no financial stability, and at some point it may not be possible to make another payment. In case of constant delays, the insurance company may terminate the contract unilaterally without paying redemption amounts. The second point, with a small amount, it also makes no sense to contact the insurance company. The smaller the amount, the less the client will receive interest on investment activities. It may come to the point that the amount received at the end of the contract will not overlap the contributions paid.