Life and health insurance is an important component of personal financial planning.
Despite its near-universal applicability, there remains much confusion and even skepticism about life insurance.
Nevertheless, it provides policyholders with many opportunities that not everyone is aware of. Let’s take a look at the key ones.
Interesting facts about insurance
1. Insurance is more affordable than commonly thought
The cost of the policy depends on many parameters, including the type of insurance, as well as the health and age of the insured, but insurance is generally less expensive than commonly thought.
It pays to take out an insurance policy when you are young because the cost of the policy increases as the age of the insured increases.
So if you are thinking about purchasing a policy, it is in your financial interest to do so as soon as possible.
2. You can purchase an insurance policy even if you’re not in perfect health
Although poor health may place limits on the amount of coverage under a policy and affect its cost, you can still contract with the insurance company.
The insurer will evaluate your health and decide the amount of coverage based on the results.
If you smoke or have serious health problems, for example, the premiums may be higher.
Nevertheless, with the help of a financial advisor, you will be able to find the best option for your situation.
3. Employer-provided insurance coverage may not be enough
An employer-provided corporate insurance policy may have some limitations:
The employer’s amount of coverage is set by the employer and may not include the full range of protection against all sorts of risks.
Very often it is quoted to your annual salary, so it’s important to understand whether this protection will be enough for you and your family in the event of a disability, diagnosis of a critical illness, or loss of life, for example.
The second limitation has to do with the fact that the insurance policy terminates upon termination of employment.
4. Insurance provides an opportunity to get a tax deduction
According to the law, the policyholder can get a deduction for paid insurance premiums for the following types of voluntary insurance contracts:
- pension insurance;
- Life insurance was concluded for at least five years.
A resident of the Russian Federation who pays personal income tax at the rate of 13% and has paid an insurance policy for himself, his spouse, children, or parents can receive a tax deduction.
5. Insurance as a way to protect savings
Accumulation insurance primarily serves as a guaranteed tool for the planned accumulation of funds.
In this case, you can determine a comfortable amount of contributions and the frequency of payment for the policy.
You can start with small amounts, gradually increasing the number of contributions and using the mechanism of indexation to protect them from inflation.
You will also have insurance protection against health risks for the entire accumulation period. Together with a financial advisor, you can decide on the level of protection
. Thus, you get insurance protection and the opportunity to save for a certain goal and get additional income.
Benefits that clients are not always aware of. Contact our financial advisors; they will tell you how to choose an insurance policy with maximum benefit for you.
6. You can be insured for pregnancy and childbirth
As a rule, pregnancy is an exception to insurance.
However, some insurance companies (including Sovcombank Life) offer pregnancy and childbirth insurance programs.
An insurance policy does not cover pregnancy and childbirth, but it protects the health of the expectant mother and her baby in the event of health complications.
7. Life insurance provides for the payment of the “survivorship” risk
An endowment life insurance has a risk called “outliving”, which occurs when the insured reaches the age specified in the contract or when the policy expires.
With “outliving”, the sum insured is paid out from the premiums paid by the client during the insurance period, with accrued investment income (if any).
An insurance policy is not just a guarantee of payment in the event of the death of the insured.
Insurance has many nuances and benefits that clients are not always aware of. Contact our financial advisors; they will tell you how to choose an insurance policy with maximum benefit for you.