Who needs life insurance and how to get it right?

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

The right policy will protect your family or help you make money.

What is life insurance

This is a type of insurance in which you will be paid money if you die or live to a certain age or term. The exact conditions are written in the contract. It may also include additional risks in the form of injury, disability, serious illness, and the like. These are optional but useful options.

The amount paid will depend on premiums, insurance program and many other factors. All of them, as well as the amount of money and the conditions under which the insurer can break the contract or leave you without money, will be indicated in the contract, so read it carefully.

Life insurance is a rather profitable investment for those who want to protect themselves in case of a difficult situation, because the payments significantly exceed the premiums paid (however, there are options here, so read the contract).

You can insure your life or someone else's. But in the second case, it is imperative to obtain the written consent of the insured. Otherwise, the contract is easy to challenge in court.

There is also joint insurance:

• on the occasion of the first death - when one of the insured dies, the money will be paid to the second;
• on the occasion of the second death - when both insured persons die, the heirs will receive the money.

Who, when and why life insurance

This insurance tool can be useful to everyone if you use it wisely.

1. For a family man with a mortgage loan

A person may die, but the debt will not dissolve. As a result, the family will either be painfully saving by paying off the mortgage, or will lose the apartment, which will be sold to return the funds to the bank. Insurance will help prevent this from happening.

In addition, the policy usually helps to lower the mortgage interest rate. At the same time, you need to understand that insurance when obtaining a loan cannot be compulsory.

2. Traveler

Life and health are insured when traveling abroad. This will help not to spend a fortune, for example, on the repatriation of the body. In addition, a policy is required to obtain a visa to a number of countries.

Sergey Leonidov General Director of the financial aggregator "Sravn.ru"

You need to pay attention to the exceptions that the insurance does not cover. And there can be many of them. For example, the consequence of injuries (including death) received while intoxicated or exacerbation of chronic diseases.

3. Young family

In this case, it is worth choosing accumulative or investment insurance. If something happens to you, the family will receive money. If everything goes well, then you yourself will receive the funds and spend them, for example, on the education of a child.

Konstantin Bobrov Director of the Legal Service "United Center for Defense"

Anyone can insure their lives. But this is especially required for those whose work or other activity is associated with danger to life. These are employees of state services (Ministry of Emergency Situations, Ministry of Internal Affairs and others), citizens working in harmful and dangerous working conditions, workers of the Far North, and so on.

What are the insurance programs

1. Risk insurance

If you die, the money will be given to the person who is listed in the contract as the recipient of the payments.

2. Endowment insurance

Combines the functions of insurance and a savings account to which you periodically report money. If you die or something else happens, specified in the contract, you or your relatives will be given the sum insured. If you live up to the date specified in the policy, you will take the accumulated amount.

Elena Potapova Ph. D. in Economics, consultant on financial literacy of the project of the Ministry of Finance of the Russian Federation

I would recommend the endowment life insurance program for a period of 5 years or more. So you can save money, and at the same time your life is insured.

3. Investment insurance

The insurer makes your money work and earns income, which he shares with you. The idea of passive earnings is tempting, but there are risks: contributions and investment income are not insured. The company will go bankrupt, and you will lose money, and investments may not bring the desired or declared profit by the insurer.

Sergey Leonidov General Director of the financial aggregator "Sravn.ru"

Cancellation of the investment insurance contract ahead of schedule threatens to lose not only earned interest, but also an impressive amount of own funds. The same consequences will be in case of inability to pay regular contributions.

According to Leonidov, among the advantages of investment insurance is protection from legal claims. Investment insurance money cannot be sued in case of divorce or withdrawn in favor of the plaintiff, while funds from a deposit or account can be.

The paid insured amount will not be taxed, and with a contract for a period of 5 years or more, you can receive tax deductions for personal income tax from regular contributions (13% per year from an amount up to 120,000 rubles). By the way, the same advantages apply to endowment insurance.

If you die, then the money under the insurance contract will go to the person who is indicated in the papers as the recipient of the payments, or to the heirs, if you did not specify the recipient.

4. Voluntary pension insurance

This point has something in common with endowment insurance, but you need to live up to retirement age.

How else are life insurance contracts different?

1. Time of payment for insurance

You can give money once when concluding a policy or deposit funds at an agreed frequency - once a year, a quarter, and so on.

2. The duration of the contract

It can be for life or for a certain period. For example, with a mortgage, a person most often insures life for a year, since it is unprofitable to conclude a contract for the entire term: if the loan can be repaid earlier, some of the money on insurance will be wasted and you will have to run to get it back.

3. Form of insurance coverage

When an insured event occurs, you receive either a fixed amount, or increased due to higher prices and investments, or decreased (for example, if the insurance is related to a loan: the less debt, the less repayment).

4. Type of insurance payments

You can be paid the amount of insurance at once or in parts during the agreed period.

How to choose insurance

It all depends on your goals. According to Elena Potapova, Ph. D. in Economics, financial literacy consultant for the project of the Ministry of Finance of the Russian Federation, life insurance products are very flexible: each program can be supplemented or changed taking into account your needs and goals.

To make the right choice, explore as many options as possible. To do this, take a look at company websites or use offer aggregators like "".

How to choose an insurer

It is worth taking the time to do this in order to avoid difficulties in obtaining payments in case of an insured event.

First of all, take into account the experience of loved ones and acquaintances. It will be useful to read reviews and comments on the Internet.

Also, look for court decisions against the insurer. To do this, go to the website of the court (of general jurisdiction and arbitration) at the location of the insurance company, open the "Search for court cases" section and enter the official name of the insurer in the search line (for example, LLC "Insurance company").

This will open a to-do list. The texts of the court decisions will make it possible to find out whether the insurer respects the rights of persons who insured their lives.

Where to draw up a contract

According to Konstantin Bobrov, director of the legal service of the United Center for Protection, in order to draw up a contract, you just need to apply to the insurance company with your passport and write a statement. This can be done online, but not in all companies and not for every program. For example, it is quite easy to get travel insurance over the Internet. And to conclude a contract under the endowment insurance program, you already have to visit the office.

To find out if it is possible to get a policy online, go to the website of the insurance company.

How to get life insurance correctly

1. Don't lie

Konstantin Bobrov, director of the legal service "United Center for Protection", advises to indicate only reliable data when filling out an application for insurance. Otherwise, the company will be able to refuse payments, citing fraud on your part.

2. Read the contract carefully

Gennady Loktev is a leading lawyer of the European Legal Service.

Consumers are often faced with the fact that insurers refuse payments. Usually the companies answer that the situation does not fall under the insured event.

To prevent this from happening, you need to carefully read the terms of the contract. In one company, the insured event will be an illness, in another, an illness caused by an accident. This is an essential detail, since the second insurance company will have to provide a document confirming that the accident is to blame for everything.

And be sure to read what is in the small print.

If in doubt, ask an experienced friend or lawyer to read the papers.

3. Ask

If any clauses in the contract are not clear, ask the employee of the insurance organization to explain them.

4. Check if all data is in place

According to the leading lawyer of the European Legal Service Gennady Loktev, the contract must specify:

• information about the insured person;
• information about the nature of the insured event (for example, harm to life or health, death, survival to a certain age);
• the amount of the insured amount;
• the term of the life insurance contract.

If at least one of these points is not disclosed, the contract is not considered concluded and payments on it cannot be expected.

5. Check the paper

Remember that the insurer is obliged to provide the citizen with every document he signs. All papers must be signed by an employee of the insurance company.