Endowment life insurance as an alternative to a deposit

Endowment life insurance is a type of insurance with which you simultaneously insure your life and health, as well as save a certain amount of money by the selected period. To put it simply, in principle, accumulative life insurance is similar to a combination of ordinary risk life insurance and a deposit in a bank. That is, during the term of the contract, you regularly deposit the agreed amount, all this time you are insured, and the money on your account is accumulated. At the end of the insurance period, you withdraw the deposited amount with interest. The amount of regular contributions is known in advance and is strictly determined. Also known is the guaranteed amount that you will receive at the end of the contract. You will not receive less than this amount, but more – quite, it will be additional investment income.

What does accumulative insurance cover?

Most importantly, you are insured against the risk of not receiving the desired final amount. Let me explain. The person was insured for a certain amount. Further, if he regularly makes payments, at the end of the term he will receive the amount of contributions with interest. If the person does not become, this amount will be fully received by the one whom he himself appointed. For example, a wife or a child. I draw your attention to the fact that the appointed person will receive the entire amount in full, even if the insured person managed to make only one payment. This is what makes endowment life insurance an attractive tool for saving for the most important goals, such as a child’s education and retirement.

What else can you insure against?

There is an option “exemption from payment of contributions in the event of a disability.” For example, a person has become disabled and cannot work. If he has activated this option, the insurance company will pay all further premiums for him. And the person at the end of the term will receive the amount that he planned. This is the advantageous difference between accumulative life insurance and a deposit. If a person saved up for a pension on a deposit, he would only have the money that he managed to save before his disability. And, perhaps, they would have been spent on treatment. But thanks to accumulative life insurance, he will receive the required amount.

There are also options: “lump sum payment in case of disability”, “injury”, “hospitalization”, “death as a result of an accident”, “the onset of deadly diseases” and others. That is, thanks to these options, you can insure your health, receive money for treatment, if necessary, or eventually accumulate the planned amount.

Who would like to have a life insurance policy

• You are the only employee in the family.
• You are a mother on maternity leave or a housewife. Thanks to the endowment life insurance policy, you will have savings for retirement.
• You have children.
• You have goals for which you need to save, regardless of your ability to work (pension) or even life (education of children).
• You want to take care of elderly parents. You can insure yourself, and designate one or both parents as the beneficiary.
• You have children from a previous marriage. In this case, you can open a life insurance contract for the child and be sure that by a certain date he will receive the required amount.
• You are a sole proprietor or self-employed citizen. Your insurance pension will be minimal, so you need to ensure a decent old age yourself.
• You are an employee with a black or gray salary. Your employer transfers in part or does not transfer contributions to the FIU for you at all. So your pension is your concern.
• You are a salaried employee with a white salary, but you want to maintain the same standard of living in retirement.
• You want to protect your money. Capital within insurance programs is not subject to division of property in case of divorce, as well as collection by court or arrest.
• You want to transfer money to a certain person, even if he is not a direct heir.
• You want to invest money, but you are not ready to deal with investment instruments.

What is needed for endowment life insurance

Тhere are conditions that must be met when opening a cumulative life insurance contract:

1. You already have an airbag for 6-12 months of necessary expenses.
2. You have free money for investment, and only a part of this money will go to contributions to the NHA. The amount of contributions should be within your reach even if your income declines.
3. You sensibly assess your financial capabilities. The contract is concluded for a long term, 10-30 years, and you must be sure that throughout this period you will be able to make contributions.
4. You understand that endowment life insurance is a low-risk instrument, which means that it has a corresponding profitability. It only provides capital protection and guarantees the accumulation of the required amount; to increase capital, it is worth using other instruments.
5. You can save money in a disciplined way over the long term.