How is the sum insured paid under a life insurance contract? Basic terms and conditions of a life insurance contract.

26.08.2024

The life insurance industry includes the following classes in the voluntary form of insurance:

Life insurance.
Annuity insurance.
Insurance for the occurrence of a certain event in life.
Life insurance with the policyholder's participation in the insurer's investment income.

Insurer- an insurance (reinsurance) organization licensed to carry out activities in this type (class) of insurance.

Policyholder- a person who has entered into an insurance contract with the insurer. Unless otherwise provided by the insurance contract, the policyholder is at the same time the insured.

Insured- the person in respect of whom the insurance is carried out.

Beneficiary- a person who, in accordance with the terms of the insurance contract, is the recipient of the insurance payment.

Objects of insurance- property interests of the policyholder (beneficiary) related to the life and health of the insured.

Insured event- an event upon the occurrence of which the insurance contract provides for the implementation of insurance payment in the manner prescribed by the terms of the insurance contract.

Sum insured- the amount of money for which the insurance object is insured and which represents the amount of liability of the insurer in the event of an insured event.

Redemption amount- the amount of money that, in accordance with the terms of the insurance contract, is payable to the policyholder upon early termination of the insurance contract.

LIFE INSURANCE

Life insurance is a set of types of insurance that provide for insurance payment in the event of the death of the insured or his survival until the end of the insurance period or the age specified in the insurance contract.

Life insurance includes the following types of insurance:

1) life insurance for survival;

2) life insurance in case of death;

3) endowment life insurance.

1. LIVING INSURANCE

Life insurance is an insurance under which the insurer, in exchange for paying a premium, undertakes to make an insurance payment to the beneficiary if the insured survives to a specified period or age. The risk covered by this insurance is solely the life expectancy of the insured, taking into account the factor of a possible decrease in income.

In life insurance, the insured event is survival, not death, therefore neither a medical examination nor a statement about the state of health of the insured is required. The choice of whether to insure or not is made by the insured himself, since it is not profitable for a person in poor health to insure.

Main types of life insurance:

insurance with delayed insurance payment;
insurance with immediate life annuity.

Insurance with delayed insurance payment. Insurance is delayed when the payment of the sum insured is made starting from a certain period of time. Those. If the insured has lived to the specified insurance period, then the insurance payment is made after a certain period of time, which is specified in the insurance contract. Through delayed capital insurance, the insurer agrees to pay the beneficiary the sum insured if the insured survives to the date specified in the insurance contract.

Premiums are paid by the policyholder during the entire period of insurance or until the day of death of the insured.

There are two types of insurance with delayed insurance payments: with premium reimbursement and without premium reimbursement.

In delayed benefit insurance without reimbursement of premiums, the premiums paid remain at the disposal of the insurer if the insured dies before the end of the insurance period. This type of insurance is purely savings, since its purpose is to save for the insured's old age.

In delayed benefit insurance with reimbursement of premiums, premiums paid are paid to the beneficiary if the insured dies before the end of the policy term.

By taking out annuity insurance, annuities usually seek to insure against the payment of certain amounts in cases where the insured lives beyond the age specified in the contract. Depending on the moment at which payments begin, annuities are divided into immediate and delayed.

Immediate life annuity is an insurance that is convenient for elderly people who would like to invest capital to secure the rest of their days. There are two types of delayed life annuities: non-reimbursable and premium-reimbursable. When insuring delayed annuity with reimbursement of premiums, in the event of the death of the insured before the end of a certain period, the insurer returns the paid premiums to the beneficiary. When insuring an annuity without reimbursement of premiums, in the event of the death of the insured before the end of a certain period, the insurance is considered canceled and the premiums remain at the disposal of the insurer.

Insurance with delayed annuity payment is a type of insurance convenient for people who care about additional pension provision. It serves as a supplement to social insurance.

Let's consider the methodology for determining the insurance amounts payable in connection with survival.

To receive the insurance amount, the policyholder or the insured must submit to the insurance organization at the place of payment of the last premiums an insurance certificate and an application for payment, if it contains a request to transfer money to the bank. If contributions were paid in cash using receipts to an insurance agent or using a bank account book, then a receipt or the counterfoil of the account book receipt for payment of the last installment is presented.

The basis for payment is also the personal account of the policyholder in the established form, reflecting the full payment of the due insurance premiums.

When analyzing these documents, the completeness of payment of all contributions, the identity of the surname, name and patronymic of the insured in all documents, and the expiration date of the insurance period are checked. If underpayment of individual premiums within the last three years is established, they are subject to deduction from the paid insurance amount. Excessive premiums paid are returned along with the sum insured.

After the decision on payment is made, a payment calculation in the established form is drawn up, on the basis of which the money is paid directly.

Survival payments associated with the occurrence of a favorable event in the life of the insured play a significant role in the popularization of life insurance. Therefore, timely payment is an important factor in strengthening the feedback between the payment of insurance amounts and the further development of life insurance.

In case of early termination of a life insurance contract with the right to receive the redemption amount, the policyholder submits an application, an insurance certificate, as well as a receipt (the counterfoil of the paybook receipt) for payment of the last installment in cash. Based on these documents and the personal account of the policyholder, the redemption amount is calculated and paid.

2. DEATH INSURANCE

Death life insurance is a type of personal insurance. The most commonly used varieties are:

term insurance;
life insurance.

The risk covered by these types of insurance is the death of the insured due to any cause (illness, injury or accident).

At term insurance the insurance amount is paid to the beneficiary immediately after the death of the insured, if the death occurs during the period specified as the term of the contract. Only in the event of the death of the insured during the term of the contract, the insurer pays the insured amount. Otherwise, i.e. If the insured survives to the end of the contract, no capital is paid, and the premiums paid remain at the disposal of the insurer.

Here are the main characteristics of term insurance:

The cost of a term insurance contract is significantly lower, since for this type of contract there is no redemption amount, so the insured amount can be significantly higher.

As a rule, a term insurance contract is concluded by persons under 60-65 years of age, since the probability of an insured event occurring for persons over 65 years of age is very high.

Let's consider the methodology for determining the insurance amounts to be paid in cases of death.

Payment of the insured amount in connection with the death of the policyholder or the insured is determined by the corresponding amount of insurance liability for a particular type of personal insurance. The wider this scope, the simpler the method for determining and the procedure for paying the insured amount, and vice versa.

The recipient of the insurance amount must submit to the relevant insurance organization an application for payment, an insurance certificate, a notarized copy of the death certificate, a receipt for payment of the next premium on the day of death for life insurance, if the premiums were paid in cash. The insurance organization, in addition, requests, if necessary under the terms of insurance, documents from judicial and investigative bodies when the death is associated with an offense, and attaches available insurance documents to the recipient’s application. If the recipients are legal heirs, they present a certificate of right to inheritance.

If death is associated with a cardiovascular or malignant disease during the first six months of endowment life insurance, with suicide and other non-insurance causes, then, depending on the conditions of insurance, after a thorough analysis of the relevant documents, a decision is made on payment of the insurance or redemption amount or on refusal to pay .

3. CUMULATIVE LIFE INSURANCE

Endowment life insurance is a combination of life and death insurance. The advantage of endowment insurance is that it offers the insured at a lower price to enter into an agreement to cover risk and ensure savings with the help of one single policy, avoiding duplication of contracts. Through this type of insurance, the insurer undertakes to:

1) pay the insurance amount immediately after the death of the insured, if it occurs before the end of the contract;

2) pay the insurance amount at the end of the contract if the insured continues to live.

Endowment insurance has a number of advantages:

the ability to objectively estimate both the number of people who can die within a certain time and the number of those who can live to a certain age;

eliminating the inconveniences that the conclusion of delayed insurance without compensation of premiums entails, since in the event of the death of the insured before the end of the contract, term insurance comes into play, thus guaranteeing receipt of the insured amount;

a combination of term insurance, the capital of which is constantly decreasing, and savings, or reserve, which is constantly increasing so that the sum of both components equals the insurance amount;

provides guaranteed rights (redemption, reduction, pledge).

Through endowment insurance, the insurer guarantees the payment of capital to the designated beneficiaries in the event of the death of the insured during the term of the policy or in the event of the end of the contract if the insured is still alive at that time. Payment of premiums ceases along with the term of the insurance contract or due to the death of the insured, if it occurs earlier. This type of insurance is nothing more than a combination of term insurance and delayed capital insurance without premium reimbursement, which have the same duration and sum insured.

Since in endowment insurance the amount of payment in case of death and in case of life is always the same, insurance companies provide a choice of several combinations that allow you to agree on a greater compensation for risk than savings, and vice versa. These combinations regulate the ratio of premium amounts.

In addition, there are other services similar to banking services for endowment life insurance. An insurance organization can issue loans for accumulative life insurance, that is, if you are insured for 10 years, then you will be able to receive loans from insurance organizations in the amount of the accumulated amount for 10 years. Loans are issued for any purpose, and the interest rate is the greater of inflation or guaranteed investment income plus 2%. At the moment, the interest rate is about 9% per annum, which is significantly lower than what second-tier banks offer. The interest rate on the loan in the future will be lower than 9%, as the state has developed a number of programs to reduce inflation. But if the insurance company offers a loan at the rate of guaranteed investment income, this means that inflation is lower than the guaranteed investment income, since the insurance company must provide loans to the policyholder at the interest rate of the greater of inflation or guaranteed investment income.

If the policyholder under an accumulative insurance contract terminates it unilaterally during the period from the fourteenth to the thirtieth day from the date of conclusion of the contract, then the insurer is obliged to return to the policyholder the received amount of insurance premiums minus expenses not exceeding twenty percent of the received amount of insurance premiums incurred by the insurer upon conclusion accumulative insurance agreement.

ANNUITY INSURANCE

Insurance annuity is a general concept for all types of annuity and pension insurance, meaning that the policyholder pays a certain amount of money to the life insurance company in a lump sum or in installments, and then receives regular income for several years or for life. Most often, accumulated amounts from accumulative life insurance, survival insurance or from pension savings are used to pay a one-time premium. Simply put, an insurance annuity is the amount of insurance paid in equal installments over a certain period or while the insured is alive. If a life insurance contract protects a person (that is, his heirs) if the insured dies too early, then an annuity protects a person if the insured lives too long, since the insurance company essentially undertakes the obligation to support the person who bought the annuity throughout his entire life. life. For example, if a person has accumulated certain funds in an accumulative pension fund before retirement, he will receive a pension in the amount of these funds, taking into account inflation. And there is a risk that he will “outlive” his savings. But by the time he retires, he can take the accumulated funds from the pension fund and transfer them to a life insurance company and buy an annuity with them, after which he will receive a pension or otherwise, an annuity for the rest of his life, even if he survives that period, under which his funds in his retirement account would have already run out. In addition, due to the fact that an annuity is a long-term product, usually up to 20 years or more, the funds paid by you are invested, so in addition to directly part of the amount you contributed, you regularly also receive investment income that earns your money on the account.

To determine the insurance premium for annuities, mortality tables are used not for the population as a whole, but for the population with higher health indicators and, accordingly, a lower mortality rate.

1. Simple Lifetime Annuity- an annuity with a fixed amount of regular payments throughout the life of the policyholder.

2. Lifetime annuity with a period of guaranteed payments- an annuity with fixed payments during the guaranteed period, regardless of whether the policyholder lives or dies. If the policyholder survives the guaranteed period, payments continue for life.

3. Term annuity with a period of guaranteed payments- an annuity with fixed payments during the guaranteed period, regardless of whether the policyholder lives or dies. If the policyholder survives the guaranteed period, payments continue until the end of the annuity term.

4. Lifetime annuity with surrender value- an annuity with payments throughout the life of the policyholder and an additional payment at the time of death, equal to the difference between the original premium and the simple amount of payments made before the death of the policyholder, if this difference is positive (investment income during the contract period is not taken into account when calculating the amount of the additional payment).

5. Joint Life Annuity- an annuity with payments to the policyholder's spouse in the event that the policyholder dies before the spouse. Payments to the spouse upon the death of the policyholder may be equal to or less than the benefits received by the primary policyholder.

6. Lifetime annuity with inflation-indexed payments.

7. Variable annuity- an annuity in which the amount of payments depends on the actual profitability of the investment portfolio (stocks, bonds and other financial instruments) chosen by the policyholder. The policyholder assumes investment risk in the hope that the income payments will support more sustainable purchasing power than the income payments of a conventional annuity, while the insurer assumes only expense and actuarial risk. Typically, such an annuity guarantees a minimum payout (or minimum guaranteed return), but the amount of the minimum guarantee is low. This is because a risky portfolio of investments has higher volatility of returns, both upward and downward.

INSURANCE FOR A CERTAIN LIFE EVENT

This class of insurance is a set of types of accumulative insurance that provide for an insurance payment in a fixed amount in the event of the occurrence of a predetermined event in the life of the insured. For this insurance product, an insured event is the occurrence of a certain event in life, that is, you can accumulate a certain amount in the insurance company before marriage, the birth of a child, admission to a university, etc. When an insured event occurs, which is the occurrence of a certain event in life, the insurance company guarantees to make an insurance payment, that is, the accumulated amount.

LIFE INSURANCE WITH PARTICIPATION OF THE POLICY HOLDER IN THE INVESTMENT INCOME OF THE INSURER (UNITLINKED).

The essence of “Unit linked” agreements is that payments for such products do not have a fixed amount, but depend, in whole or in part, on the results of the investment.

In the case of Unit linked contracts, the investment risk that would be borne by the insurer in traditional life insurance products is transferred to the policyholder (although there may be some guarantee as to the sum insured). Such contracts are very attractive as long-term investments, since market fluctuations are smoothed out over long periods of time.

The policyholder purchasing such a product can choose a fund that has been formed by the insurer to invest in certain financial instruments according to their returns and riskiness, created from the insurance premiums received from the policyholder. Insurance organizations can form funds according to riskiness, for example, less risky, risky and high risk. It is even possible to participate in several funds at the same time and later change the funds in which the policyholder participates.

Another advantage of Unit linked insurance programs is the ability to receive both insurance protection and investment income at the same time.

Finally, another advantage of unit linked products is that historically the returns on equity investments have outperformed the returns on fixed rate financial instruments. This long-term excess is typically on the order of 0.5-1%. Although this difference may seem small, it is quite significant when it comes to long periods. As a result, Unit-linked products play a very important role in the insurance market of many European countries: in some countries their share exceeds 50% of all life insurance.

Thus, it can be said that insurance organizations operating in the life insurance industry, and in particular offering Unit-linked products, are among the largest institutional investors in their national markets. First of all, this is due to the ability to invest the assets of insurance organizations in long-term projects (housing construction, etc.), and the flexibility of investment rules.

In the Republic of Kazakhstan, a special and detailed regulatory legal act is applied to “Unit-linked” contracts, which determines the procedure for the participation of the insured in the investment income of the insurance company.

INSURANCE AGREEMENT

The insurance contract is concluded in writing by:
1) drawing up an insurance contract by the parties;

2) the insured’s adherence to the standard conditions (insurance rules) developed by the insurer unilaterally (adhesion agreement), and the insurer issuing an insurance policy to the insured;

Under the insurance contract, the insurer undertakes, for the stipulated insurance premium paid by the policyholder, to make an insurance payment to the insured or other person in whose favor the insurance contract was concluded (the beneficiary) upon the occurrence of an insured event.

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Life insurance involves - by definition - two initial risks: survival (until some age or event) and death, which is considered either as an alternative to survival, or as an additional risk factor (mixed type of insurance - for survival and in case of death at the same time).

The basic characteristics of standard types of life insurance are rates (net and gross) and premium reserves.

The calculation of net rates for life insurance (as well as pensions) is based on two initial models that characterize the mathematical equality of the financial obligations of policyholders and the insurer when concluding contracts for survival and in the event of death. The left side of these models shows all probable and discounted premiums of the policyholder, and the right side shows all probable and discounted payments of the insurer. The policyholder pays his money if he survives until each subsequent year, and the insurer pays either when the policyholder survives or in the event of his death. Each payment is correlated with the insurance amount accepted (conditionally) for the Unit (i.e. for 1 rub., 1 dollar, etc.).

The probabilistic values of the modern cost of mutual payments between the policyholder and the insurer for life insurance are determined from the equality:

1+1pxv…+…n-2pxvn-2+n-1pxvn-1=1pxv+2pxv2…+…n-1pxvn-1+npxvn (1)

where is the discount factor;

px is the probability of survival of the policyholder and the corresponding probability of paying money for each of the counterparties in the amount of 1 monetary unit (hereinafter - MU);

n- the number of years the policyholder lives (from 0 to 100 years).

The probabilistic values of the modern cost of mutual payments between the policyholder and the insurer for death insurance are determined from the equality:

1+1pxv+2pxv2+…+n-2pxvn-1=qxv+1|qxv2+…+n-2|qxvn-1+n-1|qxnn (2)

where the right side uses the probabilities of death of the policyholder and the corresponding probabilities of payments by the insurer in the event of the death of the policyholder.

Based on these equalities, tariff rates for death insurance are calculated.

Calculation of payments for life insurance

Let us determine the size of the policyholder’s one-time premium at the age of x years, if upon survival to x+ n years, he must receive 1 unit from the insurer. Let us denote the size of this premium by the symbol inf. Since this premium is introduced unconditionally, the corresponding probability is equal to one. Therefore, if the present value of the premium is equal to inf. then the corresponding probable cost of payment by the insurer is determined as vn*npx, where , l- number of aged people X years. lx+n- number of persons and age X+ n years. From here --. Multiplying this ratio by the value , we obtain a modified equality, which is transformed into the formula

where are the indicators Dx, Dx+n- commutation numbers (Tables 1 and 2).

Table 1. Table of commutation numbers

(fragment, for the number of living persons lx)

Age, x years			Dx=lxvx*

Table 2. Table of commutation numbers

(fragment, for the number of deceased persons dx)

Age, x years			Cx = dx vx+1*

The table data is compiled at an interest rate i= 3%.

For example, To a 40-year-old policyholder, according to the terms of the contract, the insurer is obliged to pay the insured amount only if he survives to 45 years. At a rate of 3%, the lump sum premium that the insured must pay upon concluding the contract is equal to:

The number 0.8455 is the tariff rate for persons aged 40 years who are insured for survival to 45 years. Its value is also determined using commutation numbers (Table 1):

If the insured amount under this contract was 300 rubles, then the policyholder must pay 254 rubles. (300 0.8455).

If the policyholder makes a one-time contribution, the insurer can pay 1 unit each. annually for the entire life of the insured from the moment the contract is concluded (or - as a pension - after some time). In this case, the size of the one-time premium must correspond to the modern value of all probable payments the insurer makes at the end of the period (post-numerando):

Where Nx+1= Dx+1 + Dx+2 + Dx+з+… - commutation number. It is obtained as a result of the accumulation of values Dx from bottom to top of the mortality table. Nx values for some ages are given in Table. 1.

For example, The policyholder is 40 years old. then the insurer can pay for life but 1 unit. at the end of each year, provided that the one-time contribution is:

When lifelong payments are deferred for n years and paid by the insurer at the end of each year (postnumerando), the size of the lump sum contribution is determined in accordance with the equality:

For example: Let’s assume that the insurer agrees to pay the policyholder 1 unit. for life not from the date of payment of the premium, but after five years.

In this case, the one-time contribution of the policyholder whose age is 40 years old should be:

Under an insurance contract, the policyholder can pay premiums not at once, but periodically. To ensure that the equality of liability of the two parties under the contract does not change, the current cost of probable payments by the policyholder is reduced to a lump sum payment.

The amount of the periodic contribution is determined by the formula

where αх – annual payments of the policyholder

The numerator and denominator of this formula are modified depending on the conditions for payment of the insurance amount by the insurer.

For example, The net rate for policyholders whose age is 40 years old and who have entered into an agreement to live up to 45 years is determined as follows. The size of the policyholder's one-time contribution, which is replaced by periodic payments, is equal to Since, according to the terms of the contract, it is assumed that the policyholder will pay until the age of x + n years, then when payments are made at the beginning of each period (prenumerando), their modern value is the difference between the immediate life annuity and the deferred annuity prenumerando:

Hence the size of the annual net premium is equal to:

According to the example

If a life insurance contract is concluded for the amount of CU 300, then the annual premium will be CU 54.

Calculation of payments for death insurance

The net rate for death insurance is also determined using tables of commutation numbers. Let's look at life and term death insurance. For a person whose age is x years, the probability is moderate, within the next year of life is equal to, and the probability of dying within (n+1) years is equal to:

With life insurance in case of death, the policyholder's lump sum contribution must be equal to the sum of all probable values of the insurer's payments at their modern value. Formula (7):

where Mx and Dx are determined from the table of switching numbers (Tables 1 and 2).

For example, The net premium for life insurance in case of death of persons aged 40 years is equal to If the contract in the event of death is concluded in the amount of CU 1,000, then the one-time net premium will be CU 370. Whenever the policyholder dies, the insurer will pay CU 1,000.

In order to prevent persons with poor health from entering into the contract (i.e., increased mortality in the first years after the conclusion of the contract), the payment of insurance amounts in the event of death of the insured can be postponed for any number of years from the date of conclusion of the contract. Due to this, the countdown of the commutation number L/ is also postponed for the duration of the installment plan, and the calculation of the one-time net premium is made according to the formula

For life insurance in case of death, the annual net premium is equal to:

(9)

With deferred insurance, the net premium is paid once every year. equals:

( 10)

If the insurance is temporary, then the annual net rate is determined as:

Life insurance is the opposite of death insurance. Under survival insurance, the insured amount is paid if the insured survives to the moment fixed in the contract. If the insured dies during the term of the contract, no insurance payment is made.

All types of life insurance can be grouped into two subgroups:

Capital insurance.

Rent Insurance.

Capital insurance combines types of insurance that aim to accumulate a large amount through the systematic payment of small contributions, which is paid in a lump sum. Capital insurance includes:

savings insurance;

wedding insurance;

children's insurance;

mixed life insurance, etc.

Rent Insurance includes types of insurance, the terms of which provide for the gradual expenditure of contributions made in the form of regular payments. An example is pension insurance.

The terms of the life insurance contract may contain benefits for the policyholder:

Reduction of the policy.

Redemption amount.

Reduction of the policy means a reduction in the amount of the insured amount when the payment of insurance premiums is stopped and the insurance contract is maintained. The size of the pension is calculated based on the size of the insurance reserve at the time the policyholder makes a decision to reduce the policy. The policyholder may reinstate the reduced policy. In this case, the policy will again receive its previous characteristics, subject to payment by the policyholder of all unpaid premiums and the established technical percentage. Technical interest refers to the increase in funds included in the calculation of the insurance rate for a given type of insurance.

Under loan In life insurance, we mean the provision by the insurer to the insured person of a certain amount against the security of a reserve formed from the premiums paid under this agreement. The maximum loan size coincides with the size of the fund accumulated as a result of making insurance premiums. As a rule, a life insurance loan is issued at an interest rate that is significantly lower than that established in the financial market. The loan can be issued no earlier than after the expiration of a certain period from the date of conclusion of the insurance contract (usually no earlier than two years). The maximum period for which a loan can be issued is limited by the age of the insured person, upon reaching which the insurer must pay an annuity or pension to the insured person. If the loan is not repaid within the specified period, the insurance contract is considered terminated. In this case, the policyholder and the insured person lose the right to receive any insurance payments and the redemption amount.

A distinctive feature of types of life insurance is that the policyholder has the right to receive redemption amount upon early termination of the contract at the request of the policyholder or insurer . The redemption amount represents part of the savings formed under the contract on the day of its termination and is payable to the policyholder. The amount of the redemption amount depends. Its size depends on the insurance premiums actually paid, the length of the expired insurance period and the validity period of the contract, as well as the applicable rate of return. The insurance contract may provide that the policyholder's right to the redemption amount does not arise immediately after the contract enters into force, but after some time, for example, after a year. Typically, the right to a redemption amount arises provided that the contract has been in force for at least 6 months. An exception may be contracts under which the insurance premium is paid in a lump sum. Upon receipt of the redemption amount, the insurer's expenses for servicing this contract are deducted from the amount of the formed insurance fund. If the insurer violates the terms of this agreement, then the policyholder is paid all funds in full.

Survival insurance is insurance under which the insurer, in exchange for the payment of premiums, undertakes to pay capital or annuity to the beneficiary. The second is usually the insured person himself, if the latter lives to the specified term or age. The risk covered by this insurance is solely the life expectancy of the insured, taking into account the possible decrease in income that old age brings with it.

In life insurance, neither a medical examination nor a statement about the health status of the insured is required. The choice of whether to insure or not is made by the insured himself, since it is not profitable for a person in poor health to insure.

Main types of life insurance:

insurance with delayed capital payment without return of premiums;

capital insurance with delayed payment and return of premiums;

insurance with immediate life annuity;

insurance with delayed payment of life annuity.

Delayed payment insurance. Insurance is considered to be delayed when the payment of the sum insured is made starting from some future date, after a certain period has passed. Through delayed capital insurance, the insurer undertakes to pay the beneficiary the insured amount if the insured survives to the date specified as the end of the insurance.

Premiums are paid by the policyholder during the entire period of insurance or until the day of death of the insured.

There are two types of delayed capital insurance: with premium reimbursement and without premium reimbursement.

In delayed capital insurance without reimbursement of premiums, the premiums paid remain at the disposal of the insurer if the insured dies before the end of the insurance period. This type of insurance is purely savings, since its purpose is to save for the insured's old age.

In delayed capital insurance with premium reimbursement, premiums paid are paid to the beneficiary if the insured dies before the end of the policy term.

An immediate life annuity is an insurance that is convenient for seniors who would like to invest capital to fund the rest of their days. There are two types of delayed life annuities: non-reimbursable and premium-reimbursable. In delayed annuity insurance with premium reimbursement, if the insured dies before the end of a specified period, the insurer returns the premiums paid to the beneficiary. In annuity insurance without reimbursement of premiums, if the insured dies before the end of a specified period, the insurance is considered canceled and the premiums remain at the disposal of the insurer.

Insurance with delayed annuity payment is a type of insurance convenient for people who care about additional pension provision. It serves as a supplement to social insurance.

To receive the insured amount, the policyholder or the insured must submit to the insurance organization at the place of payment of the last premiums an insurance certificate and an application for payment, if it contains a request to transfer money to a savings bank, at his place of work or by mail. When paying the insurance amount by personal check to a savings bank, no application is required. If contributions were paid in cash using receipts to an insurance agent or using a passbook to a savings bank, then a receipt or the counterfoil of the passbook receipt for payment of the last installment is presented.

The basis for payment is also the personal account of the policyholder in the established form, reflecting the full payment of the due insurance premiums.

When analyzing these documents, the completeness of payment of all contributions, the identity of the surname, name and patronymic of the insured in all documents, and the expiration date of the insurance period are checked. If underpayment of individual contributions within the last three years is established, they are subject to deduction from the paid insurance amount or pension. Excessive premiums paid are returned along with the sum insured.

After the decision on payment is made, a payment calculation in the established form is drawn up, on the basis of which the money is paid directly.

This type of insurance is also called “mixed life insurance” - a type of personal insurance that provides for the payment of a set amount of money upon expiration of the insurance contract, as well as during this period in the event of loss (full or partial) of disability from an accident or death for any reason. reason.

The policyholder (who is also the insured, although the insured may, for example, be a relative) is obliged to pay regular insurance premiums to the insurer, which guarantees payment of insurance coverage to the beneficiary in the event of the death of the insured during the validity of the contract, and if the insured survives until the end of the insurance contract, then insurance coverage is paid to him.

A characteristic feature of this type of insurance is the equality of the amounts of insurance coverage in the event of death and in the event of survival to a certain period.

Survival insurance gives the policyholder scope for choice: you can choose the desired sum insured, the terms of the contract (5, 10, 15 and 20 years) and the beneficiary; Additionally, a mixed life insurance contract may provide for the payment of double or triple the sum insured in case of permanent loss of the insured's general ability to work as a result of injury, and if the loss of ability to work is 60% or more, then subsequent premiums are halved.

The paid insurance coverage for accidents does not affect the amount of insurance coverage in case of death. Premiums can be paid monthly, quarterly, annually or for the entire insurance period. For an insured person over 75 years of age, the contract is considered invalid.

The survival insurance contract is the first combined type of insurance: firstly, it contains all the features of a term life insurance contract, and secondly, it additionally involves the payment of insurance coverage for a fundamentally different insured event - the survival of the insured until the date specified in the contract (usually – contract expiration date).

Essentially, a “cumulative component” is added in its simplest form. It gives rise to a fundamentally new characteristic of the insurance policy, which acquires a personal value.

Tariffs

The premium for life insurance is significantly higher than the premium for term insurance in case of death and is similar to periodic deposits in the bank to accumulate the required amount. The illusion is created that the insurance premium for this type of insurance consists of two parts: part of the premium (small) is directed towards term life insurance in case of death during the term of the contract, and the second part (larger) is the “savings component”, these are the amounts which are periodically paid by policyholders, invested by the insurer and by the end of the life insurance contract “grow” to the amount of insurance coverage in the event of the insured surviving to the end of the insurance contract (i.e. a certain age).

In fact, this is not so, it’s just that the funds that the insurer must accumulate for the insurance payment should be significantly more than for term life insurance. All other things being equal, out of 100 term life insurance contracts for 1 year with an insured amount of 1000 rubles each, insurance compensation will be paid, say, for 2-3 contracts, i.e. only 3 thousand rubles; but under 100 life insurance contracts, everyone will have to pay out under the same conditions, i.e. 100 thousand rubles. That's why the premium is higher.

The “savings component” of an insurance policy for life insurance is formed not only through the insurer’s investment of collected funds, but also through the redistribution of funds between all insured under this type of insurance. Below is table 1, which shows how the insurer forms survival insurance funds and what the tariff calculation is based on. This table can serve as an illustration for any type of life insurance with a savings component.

Let us assume that 10 people of the same age enter into life insurance contracts for 6 years with payment of an insurance amount of 90 rubles in the event of death or in the event of survival until the end of the contract, i.e. after 6 full years. Also, for the sake of simplicity, let us assume that the insurer does not invest the collected funds, but keeps them in a bank and does not receive any income, the insurance premium is paid at the beginning of the year, and the payment of insurance coverage is made at the end of the year in which the death of the insured occurs.

Also, we will assume that every year one of the insured dies. Table 1 contains a schedule of payments that each of the policyholders must make so that the insurer can fulfill its obligations to each of them. The paid (equal annual) premiums should be enough to pay 900 rubles of insurance coverage. By correlating the insured amount (90 rubles) and the annual payment, you can calculate the tariff for this insurance.

Table 1.

Schedule of payment of premiums by ten insured persons

Years 1-6							Size Reserve Fund	Total
							200
							290
							360
							410
							440
							450
Premiums paid	120	120	120	120	120	100		900
Payments made								900
Balance: Bonus payments

Based on the table, conclusions can be drawn that apply to any type of insurance with a funded component.

First, policyholders who lived to see the end of the contract paid more than they received. In the example, 5 policyholders paid 120 rubles and received 90. In total, 6 policyholders received a negative balance of “premium - payments”. For 4 policyholders, the amount of premiums paid is less than the insurance coverage paid under the contracts they concluded. The amount of “overpayment” of some policyholders is equal to the amount of “cash winnings” (security less premiums paid) under other insurance contracts. But the insurance rate is (120/90) x 100% = 133%. For the insured in our example, the return on investment in this type of insurance is negative.

The conclusion follows: if the funds of the insurance fund are not invested by the insurer, then insurance with a funded component is a form of social support for healthy and young elderly people and people with poor health, and not a method of accumulation.

This element of redistribution is present in any type of life insurance. The example shows how the fee for “pure insurance” is set: everyone who survives to the end of the contract with their periodic premiums must cover the amount of benefits paid for those who did not live to see this date.

True, the insurer may make a mistake in its calculations and set the amount of the insurance premium that exceeds the necessary one. In such a situation, at the end of the year, the insurer may return part of the excess insurance fund to the policyholders.

Next, we will describe the conditions for paying bonuses under contracts with a funded component, however, from the given example it is clear where the bonus could, in principle, come from: sources of bonuses - a decrease in the mortality rate of the insured in comparison with the calculated data (for example, the assumption of the death of one insured person every year will not be confirmed, and in six years, only two insured persons will die) and investing the accumulated funds of the insurance reserve. The company can return part of the “excess” insurance reserves to policyholders in the form of a bonus. In this case, we are not talking about the distribution of company profits, but about the technical adjustment of reserves and bonuses.

Returning to the schedule for paying premiums for life insurance, it is easy to calculate that it is possible to balance the amount of premiums paid and life insurance coverage for each insured person by investing the insurance fund at 23.5% per annum.

Then each policyholder will have to pay 90 monetary units in order to get them back at the end of the contract (i.e., place their funds with zero profitability). Here is how, as an example, the profitability of investing funds from reserves (i.e., insurance premiums collected by the insurer) and the profitability of investing funds by the policyholder (i.e., the ratio of the insurance coverage received and the amount of premiums paid) correlate (Table 2).

Table 2

Ratio of return on investment of reserve funds

Return on investment of insurance reserves (according to the compound annual interest formula)	Profitability of investment of funds by the policyholder in this type of insurance (according to the formula of compound annual interest)
23,5%
30%	1,15%
37%	2,4%
45,5%	3,8%

The example shows that when other things being equal insurance with a savings component can never provide the same increase in invested funds as, for example, a bank deposit, savings certificate or purchase of a share in a mutual fund. Indeed, in the case of insurance, there is always a fee for “pure insurance”, i.e. contribution of funds to the fund from which payments are made in cases of death of the insured; These funds seem to fall out of the investment turnover and are regularly paid to the beneficiaries.

Additional life insurance options

As in the case of term insurance, the insurer may offer the policyholder to participate in the profits (i.e., receive and manage the bonus).

Although a life insurance policy sometimes has a favorable sum insured, few policyholders exercise the option of getting it by terminating the contract before its end date unless there is a compelling reason to do so (for example, inability to pay periodic premiums). Life insurance is traditionally seen as a savings method. And until the contract has expired, policyholders usually do not use the additional capabilities of this insurance, because all of them are provided to the detriment of savings.

Advantages and disadvantages, practical usefulness

Survival insurance has a long-term nature, a significant cumulative component, but the conditions under which the original insurance contract was concluded cannot be changed by the parties.

Much can change: the economic situation, the life expectancy forecast for those who enter into such insurance contracts, but policyholders under existing contracts are deprived of the opportunity to take advantage of the fruits of economic growth and improved demographic statistics. Yes, the insurer pays bonuses, but the policyholder cannot be sure that the bonuses paid fully correspond to the changes for the better that have occurred during the term of the contract.

Those who paid for their contract with one premium at the beginning of its validity find themselves in the worst position: it will be difficult for them to correct anything. Even if such a policy has a surrender value that grows as the contract ages, can one be sure that this growth will be adequate to the income generated by other financial instruments (the same bank deposit)? Such a policyholder has completely placed his fate in the hands of the insurer for the entire duration of the contract.

Like term life insurance, survivorship insurance is attractive due to its simplicity; any policyholder can easily understand it. Much less often than term life insurance, survival insurance is used in schemes involving the repayment of any loan of the insured.

If term insurance with a decreasing sum insured can accompany almost any loan repayment scheme, guaranteeing the repayment of loans in the event of the death of the insured, then survival insurance is not so convenient: it is suitable for guaranteeing payment of a loan that is repaid at the end of the term of use with a lump sum payment. In this case, the borrower (aka the insured) enters into a life insurance contract (under which a payment is also made to the lender in the event of the death of the insured), the expiration date of which coincides with the date of payment on the loan. The insurance collateral obtained in this way goes to cover the loan.

Lifetime Insurance Options

Life insurance contracts may vary in terms: from 1 to 10 years, for 20 years, for 30 years; can be adapted to the age of the insured and end when the insured turns, for example, 18 years, 60 or 65 years. Survival contracts differ in the procedure for paying premiums: regardless of the term of the contract, it can be paid in one premium at the beginning of the contract, it can be paid in equal periodic (monthly, quarterly, annual), or it can be paid in increasing periodic premiums.