Cumulative insurance in Europe: reviews

All sorts of insurance services have long and firmly entered our life. Every year we protect our health policies, we insure the car, and sometimes we get additional programs. Cumulative insurance is one of the few services that the vast majority of Russians do not have the faintest idea. While in European countries such a policy is a matter of routine and even to some extent necessary. For many years of practice, people are accustomed to saving money in this way. Moreover, the policy of the NJC protects the most valuable thing that a person has - his life and health.

Although human life is priceless, it does not mean that it is not necessary to appreciate it. Approximately this way of thinking has every third European. It is because of this that life insurance in Europe has been developing for many years.

What it is?

This policy is a bit like a deposit. NCM - a long-term investment of funds with their subsequent accumulation and investment for obtaining surplus income.

You can conclude such a contract from 3 to 35-40 years. It can be considered as a kind of piggy bank, which additionally protects you from costs in the event of death, serious illness, injury, disability and other likely risks. If any of the above happens to you, the company will pay you the full amount. If everything goes well, the funds will continue to accumulate.

Monthly contributions to funded insurance are divided into two parts:

• On payment of probable risks;
• On the formation of piggy banks.

The cumulative part can be invested in various financial models in order to obtain ancillary income. After the expiration of the contract, the client can independently decide whether he wants to receive all the accumulated amount at the same time or prefers uniform payments in the form of an increase to the pension.

If we talk about Russian legislation, then we can argue that such amounts are not subject to taxation. Also, they can not be recovered in favor of third parties, even in court. That is, only the client and no one else can dispose of the funds. Insurance (funded) in Europe has almost the same advantages.

What is the difference between risk insurance and cumulative insurance?

A risk policy means such a type of contract, when the insurance amount is paid 1 time. In this case, the contract prescribes a fairly large amount, which will be paid to the client in the event of an insured event. However, if nothing happened before the termination of the contract, the insured remains with the money deposited.

The situation when the insurance is cumulative looks different. In Europe, you bought a policy or in Moscow, it does not matter. Then the money will have to be paid monthly. If you have free funds, you can deposit the amount immediately for a year.

The company accumulated funds on your account continuously invests and tries to multiply. This is the income of the insurer. Money is redistributed into two types of income:

• Guaranteed. The income here is quite small, it can vary between 3 and 5%.
• Additional. This part will depend on how successfully the company was able to invest your funds. This can be 2% or 15%.

If the insured event still occurs, the client immediately receives the entire amount prescribed in the document. It does not matter how much money he managed to make.

For example, you have entered into an NCM contract for 10 years and must annually contribute $ 5,000. But two years later you got into an accident, became disabled and lost the ability to work. Under the terms of the contract, you will receive all of $ 50,000, despite the fact that only $ 10,000 was contributed. If, for all ten years, nothing bad has happened to you, the company will return to you all 50 thousand and even charge some interest from above, if it is stipulated by the contract. That's why insurance is cumulative. In Europe, such a policy has every third. Let's see why.

Historical reference

The first insurance policies appeared in ancient Greece. But in Europe, this phenomenon became popular only by the beginning of the XVIII century. The progenitor of life insurance was James Dodson. He personally traveled all the cemeteries of London and copied the dates of life and death in all the burials of a year ago. Thus, he calculated the approximate life expectancy of an average Londoner and calculated what exactly the amount can be an insurance premium. But only after the lapse of 77 years insurance (funded) in Europe has become more or less massive. Since that time, insurance organizations offering such a service have become much more numerous. And some of them work to this day.

Current affairs

About 70% of all payments today are in the UK, Germany, Italy and France. Most companies in this segment have a solid reputation and vast experience. It is this fact that makes cumulative life insurance so popular.

Insurance companies cover almost the entire population with their services. In eight families out of ten, all members, including babies, have policies. Some Europeans have several insurance policies together with different accumulation conditions. On average, Europeans spend up to a quarter of their income on insurance programs. Here, such a tool is an occasion to accumulate additional funds for studying a child and an increase to a pension. Therefore cheerful grandmothers and grandfathers, traveling around the world and cheerfully flipping cameras, already surprise no one. They can afford it.

European legislation allows investing clients' money exclusively in the accounts of the largest banks or in the shares of profitable enterprises. Responsibility of the UK is additionally guaranteed by international reinsurance companies. This means that the clients' money in any case will not disappear anywhere. With this level of reliability, such insurance is akin to a very profitable deposit.

Single market of European insurance

As you probably understand, savings insurance in Europe is a very responsible business. As early as the middle of the 20th century, several European countries began to form a single insurance market. The central body is called the European Insurance Committee, and its main office is located in Brussels. The objectives of such an event are quite serious:

• The development of common standards for the work of all organizations that deal with insurance;
• Strict control over the observance of the agreements reached.

Requirements for organizations

Organizations providing insurance services should adhere to such rules:

• It is prohibited to engage in any other kind of activity, except for the provision of insurance services;
• Top managers and owners of companies are required to incur full compulsory liability for losses to customers, not to have previous convictions and to honor the letter of the law;
• The company must have a guarantee fund that can provide all the necessary payments.

To date, any UK that has a license to provide insurance services in an EU country can offer similar services in other countries, members of this union.

Featured Companies

The list of the most popular European companies that implement accumulative insurance (reviews they have the most positive), looks like this:

• Munich Re - Germany;
• AXA - France;
• Powszechny Zakład Ubezpieczeń (PZU) - Poland;
• Assicurazioni Generali - Italy;
• Vienna Insurance Group - Austria;
• GRAWE - Austria;
• Allianz - Germany;
• Legal & General Group - United Kingdom.

These companies offer a wide variety of programs for adults and children alike. Using one of them, you can easily accumulate funds in case of disability or to any particular event (training, wedding).

In the middle of the last century in Europe, so-called investment insurance began to gain momentum. Its most basic difference from the accumulation described by us is that during the whole term of the contract the client can independently dispose of the funds. That is, you can decide for yourself where to invest money, and where not. But there is also a negative point: the owner of the policy is also responsible for the decision.

Conclusion

It is likely that over time, the practice of accumulative insurance in Russia will become as popular as in Europe. And soon Russian citizens will appreciate the literal meaning of the expression "the value of life."