Life insurance


Life insurance is the only plan that guarantees you payment of a certain amount in an unknown time.

Smiljan Mori

Anything can happen in life. That is why a timely formalisation of an insurance policy that guarantees you payment of certain amounts in hardship, will cushion any of the shocks that life often presents to people.

Financial help in form of compensation at the moment of unexpected misfortune is a material and strong support helping people to take care of their health problems and life activities.

Policyholders may choose, at their discretion, type of insurance to fit best with their plans for the future, finances, and serve to their purposes:

You might need financial help in a complicated situation in your life? 

Accident and illness insurance will help to cover expenses for treatment and rehabilitation in case of serious illness or grave accident. 

You want to provide for a financial “backup” for your family? 

Life insurance – in case of loss of breadwinner: your family will receive an agreed amount of money. 

You are saving money for the future and think how to make them “work”? 

Accumulative (endowment) insurance will guarantee reception of certain amounts in the future without any risks.  

Thinking how to provide for the same level of life after you retire? 

In this case, retirement insurance will be suitable for you. 

Accident and illness insurance enables its holder to receive insurance amount or any part of it in case of life or health detriment because of an accident. Time span is extremely important in these cases. For an insurance company an accident is an unexpected and sudden effect on the human body leading to serious health disorders and even death of holder of the insurance policy. 

To be classified as an accident, an event has to be abrupt and unexpected, in this way, long-term diseases, professional diseases and other long-term adverse effects shall not be recognised to be an insured event. For an insurance company an accident is an unexpected damage and life hazard through no fault of the insured person. 

Usually before formalising an insurance contract, an insurant will fill out a detailed form, including questions about way of life. It is possible that the insurant will have to undergo a medical revision, and only then, an insurance fee will be determined. 

One should remember that there is no point concealing any life-threatening diseases. Insurance companies are aware of possible client-side deceptions, and all insurance contracts have a clause providing for such cases, when an insurance company will cover nothing if it will be discovered that the client provided information known to be false when signing the insurance policy. Providing false information includes concealing details about health condition of the client and any significant points related thereto. That is why if it will be discovered that before an insurance contract was signed a client had a disease or a pathology, and knew about it but did not inform the insurance company, the insurance policy will be cancelled. 

No amounts will be paid in case of deliberate personal injuries leading to death: suicide. 

Life insurance is a guarantee provided by an insurer to a beneficiary, indicated in the insurance contract, who receives the full amount of insurance in case of death of the insured. One may insure his or her own life (than insurer and insured will be the same person), or insure another person’s life (than insured and insurer will be two different people). In both cases a beneficiary shall be indicated – that person will receive the insurance money in case of insured event.

Validity of such insurance is at all times subject to all instalments being paid during the established period. 

Unit-linked life insurance is a cash-value life insurance programme. Once the insurance contract expires, the insured receive their money saved during many years, along with the income, obtained by the insurer through financial operations. The money of the insured are securely protected by the insurance company, which provides for safety of its clients and guarantees refund of money to all participants of such investment projects. 

The main difference of these programmes of cash-value life insurance is the principle of formation of capital. Different stock market programmes are actively used. 

To get maximum benefit from such insurance policy one should sign a contract for the longest possible time. In unit-linked life insurance, the size of the insurance amount depends on various factors, which shall be discussed with the client. 

An insured person may request his/her money before term, although in some cases a penalty will be applied for early dissolution of contract. 

Unit-linked life insurance provides for a series of insured events when the insured receive compensations.

They include the following: 

  • Defunction of the insured as a result of an accident; in this case the insurance amount is incremented by the interests obtained as a result of investment in stock market; 
  • Death of the insured person – the insurance amount will be increased by the amount of investment income; 
  • Disablement of the insured; in this case the insurance amount will be paid as indicated in the insurance contract (usually this amount is expressed as a percentage of the capital accumulated); 
  • Personal injuries suffered by the insured – a certain sum, calculated as a percentage of the insurance amount shall be paid in such cases. 

Contribution pension system enables any person to provide for his/her own decent pension in the future, with guarantee. The system is supplementary to the social pension and enables to provide for a private pension with one’s own means. The size of future pension shall be established during signature of the insurance contract, depending on the wishes and possibilities of the insurant. Pension savings may be paid as pension either for life or during a period established by the insurance contract. 

Contribution period, established in the insurance contract, is the period between arousal of obligations and complete fulfilment thereof. 

In case of death of the client of the insurance company during the contribution period, his family will receive the reserve amount accordingly to the contribution pension insurance contract. Accumulated capitals will neither be lost in case of death of the insured during the payoff period. 

It is possible to suspend payment of instalments in case of insolvency of the insured. In this case, the pension will be recalculated accordingly to the amount accrued until the moment when the payments were suspended. 

Another type of life insurance is “for time left to live” 

During certain time (until the insured reaches a certain age) he/she pays instalments to the insurance company. In this case, there are two insured events: Death of the insured or living until certain age. In the first case, the payment shall be made to a beneficiary indicated by the insured in the contract, and in the second case, the payment shall be made either to the insured himself or to any beneficiary indicated by the insured. 

For the time left to live insurance option, amount of payment depends on the age of the insured. 

It is difficult to say how much may each insurance program cost, as all of them are calculated individually. 

Amount of insurance instalments depends directly on several factors:  

  • Age of the insured (at the moment of celebration of contract); 
  • Health condition (accordingly to the results of medical revision); 
  • Conditions of life and work of a natural person, participating in the life insurance programme; 
  • Financial condition of the insured, on whom the type of insurance policy depends; 
  • Existence of children and other dependents, economically supported by the insured. 

What is good about life insurance is that it guarantees a decent life under any expected or unexpected circumstances provided for by the insurance contract. 

Here the expression of Benjamin Franklin is very at target: “It is a strange anomaly that men should be careful to insure their houses, their ships, and their merchandise, and yet neglect to insure their lives, surely the most important of all to their families and more subject to loss."