Is it worth investing in life insurance in a crisis?
During the crisis, most banks stopped caring about maintaining and increasing the savings. True, a holy place is never empty. This gap was partly compensated by life insurance companies.
During the year, the life insurance market will decrease by only 20-30%, and without high-profile closures of companies and the introduction of temporary administrations, as in the risk insurance market.
True, the regulator assures that, despite the reduction in premiums, life insurance companies fulfill their obligations to customers and increased the volume of insurance payments by 35.8%.
Life insurance companies are not as prone to bankruptcy as risky ones. The reliability of such financial institutions is supported by insurance reserves, which amounted to 3 billion hryvnia.
Under the conditions of the crisis, people abandoned savings policies and insured priceless values: health and life.
Endowment insurance sales have seriously deteriorated in the retail market and there is no reason to believe that the situation will change for the better in the near future.
The number of health and accident insurance contracts has increased in relation to accumulative insurance. Therefore, many life companies improved their risky products, supplemented them with new options that were interesting for the client.
Today, insurance agents model a financial security program for each individual client, taking into account the composition of his family, the level of material wealth, health status and economic factors of the economy. In an effort to retain customers, life insurance companies offer favorable conditions.
Many of the restrictions that companies set in the past have now been lifted. As, for example, the ability to reduce the amount of payment, increase the frequency of contributions.
In the life insurance market, experts assure, nothing bad will happen. The main expense of life insurance companies is the payment of commissions, which decrease proportionally with the fall in sales of life products. In addition, the life market will avoid significant fluctuations and shocks thanks to the so-called “long” money, which ensures reliability. True, investments for development should not be expected in the near future either.
Insurance capital parasitizes on bank capital, so the revival of the insurance market will be synchronized with the general economic recovery.
Whether this rise will be smooth or explosive depends on many global financial factors and policies in the world, she believes. The global insurance market should not expect growth within 3-5 years.
Life insurance is more like investment activity than actual insurance. Experts believe that life insurance companies have hardly suffered during the crisis, because they owe nothing to their customers.
Today, the demand for life insurance is low, often people buy what insurance agents aggressively sell.
To insure against an accident or to purchase a “healthy” policy is still all right. But having decided to give preference to a funded policy, it is important to be sure of the stability of financial income, at least throughout the year. For the termination of contributions threatens the insured with the loss of already paid insurance payments.
Therefore, you need to think twice before giving preference to accumulative insurance, which in times of crisis can easily turn into a dubious investment.
On the other hand, the level of reinsurance in life insurance is very high, so at least a life policy is able to save savings.
Author: Nataly Kramer
