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Friday, April 20, 2018

Guarantee a comfortable old age

The last two years in Russia growing demand for investment life insurance (coli). “EV” understood, is it possible to profit from the fact of its own existence.

photo: Mikhail Kovalev

Insurance or contribution

Experts define this financial product in different ways. You can often find the wording that the coli is a type of insurance with an investment component. However, for example, Elena Ushkova, head of Department on work with partners of ICD, said: “the coli is a investment product that enabled life insurance”.

A slightly different view is held by Alexander Denisov, Deputy General Director of “Alfa insurance-Life”: “the Goal of investment insurance is the accumulation of large sums of money to the customer, the company and the simultaneous receipt insurance coverage by a large amount. Investment income that the insured receive at the end of the period, is an added bonus and not the purpose of the insurance program”.

As explained by the head of Bank assurance PSB Maxim Kholmatov, insurers can’t sell investproekty directly, because they do not fall under the scope of their license. Therefore was developed a combined program that, on the one hand, allow insurers to raise funds of the population, and on the other allow customers to receive a double benefit in the form of a full insurance contract and investment income potential.

The specificity of the product

The coli contract is usually for a long time — at least 3 years during which the policyholder pays contributions at specified intervals (monthly, quarterly, or immediately the full amount). “The invested funds are divided into insurance, investment and conservative parts. Funds conservative part invested in fixed income instruments and ensure the return of invested money at the end of the program. The investment part is placed in market-based assets that must be repaid to the client in the case of growth. If you increase the market price of the asset the client receives the income in a pre-determined share of growth (share may be more or less than 100%). Upon completion of the program the client receives the amount equal to the amount of the contribution, and, if available, and investment income. The size of investment income is not limited, it depends on the client’s investment strategy and term of placement of funds”, — said the first Deputy Chairman of the Bank “Russian Standard” Evgenie Lapin.

In addition, five-year contract gives the right to the coli tax benefits: tax deduction of 13% from the paid insurance premium and the lack of obligations for the payment of taxes on insurance payments. Clarify that the three-year agreement gives no such right. The maximum amount of the insurance premium, receive a tax deduction is limited up to 120 thousand rubles.

One more positive moment — to conclude the agreement coli can be directly with several companies. But there are nuances. In terms of tax deduction in the amount of the insurance premium, as explained by the press-service SK “RGS-Life”: “the Law defines the maximum amount of tax incentives for all insurance contracts. The client can enter into several contracts of insurance, but the exemption is currently limited by law the total amount of 15 600 roubles”. In the part of exemption from income tax as explained Maxim Kholmatov, personal income tax is only payable on income that exceeded the refinancing rate of the Central Bank of the Russian Federation for the duration of the program.

Have agreements coli its own characteristics. “First, it is the special status of life insurance policies. They are not property and therefore not subject to confiscation, arrest or section (e.g., divorce). That is, they can not be imposed a penalty by third parties. secondly, that the targeting of the product. Insurance payments in case of death are not included in the inheritance and produced assigned to the beneficiaries, and insurance payments for survivorship — only to the insured,” — said the Deputy Chairman of the Board, Rosgosstrakh Bank Asker Enikeev.

The fly in the ointment

Of course, the main drawback of the coli — no guaranteed income. At least you can promise a 200% profit, but in reality, accurately calculate customer can only pay the amount that is stated in the contract and does not exceed the amount of insurance premiums.

Another shortcoming of the coli is no early termination of the contract, preserving all of the money made. As already mentioned, the minimum term of such contracts is three years (often five years). And it can be a significant problem. In the event of termination of the contract, the client gets only the redemption amount. Moreover, depending on the method of payment (lump sum or installments), the period of insurance and the date of termination of the contract this amount can range from 0% to 90% of the insurance contribution.

Another major drawback coli is the lack of a guarantee Fund, an analogue of ASV, which could provide payments to the client in cases of license revocation or bankruptcy of the insurance company. If the insurer in such a situation will not give the portfolio or terminate contracts with return of premiums, to refund to the client will be possible only once in the register of creditors.

We should not forget about the insurance component. It is not tangible, since the occurrence of the insured event according to the standard risks (e.g. “risk of death from any cause”) is reimbursed as a contribution made to investment income, calculated on the date of the insured event. Only in the presence of additional risks (for example, “death in the accident”), you can get an additional amount.

And last, what users are saying the coli is the opacity of the investment strategy of insurers. As a rule, the client is offered a choice of several investment strategies with different degree of participation. But in any case, to fully control attachments, such as open brokers investment accounts, the policyholder will not be able.

As noted by Elena Ushkova, at the conclusion of the contract the coli insurance company gives understanding of profitability on selected product on the basis of the analysis of the statistics of previous years. However, this does not mean that the stock market will behave similarly in the future. Coli belongs to the category of complex investment products carries certain risks, and the opportunity to earn. It is wrong to perceive coli as a Bank Deposit with a guaranteed interest rate, and that the client needs to understand, the expert concluded.


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