Cumulative life and risk insurance



Depending on the possibility of using the savings for classic life insurance is usually divided into two categories:
risky and
endowment insurance.
Regulatory definitions of these two concepts, the division is conditional and based on the established practice of the use of these terms.
Risk life insurance provides financial protection for the family of the insured in the event of his death. In such contracts may be added to insurance against accidents and illness, disability insurance, insurance in case of deadly diseases. Significant savings on the contract is not formed, all the money paid by the client are used to cover these risks and expenses of the insurance company. No payments at the end of the insurance period is not made.
The main type of risk life insurance is term insurance in case of death (in English literature insurance - term life insurance).
Endowment life insurance, as the name implies, is focused on the gradual formation of savings (savings). At the same time it always includes the risk component that provides protection in case of death and other dangers stipulated in the contract.
The most common form of savings insurance is a mixed life insurance (Eng. - Endowment insurance). Payment of the sum insured thereon made in the case of death of the insured during the insurance period or at the end of the term, if the insured person lived to see it. in the contract also includes accident insurance.
For life insurance is characterized by:
long-term insurance, which allows significant savings gradually form the contract of relatively small contributions;
a guaranteed return on savings accrued under the contract, as well as, in some cases, the possibility of obtaining additional investment income;
Because of the above factors insurance reserves for life insurance for such an agreement with the passage of time growing up. In case of early termination of the contract has the possibility to get most of these savings in the form of a redemption amount.
By accumulative insurance include all contracts providing for payment on survival, including pension insurance contracts. However, life insurance in case of death (whole life insurance) is also considered a cumulative, but not include the risk of survival. Insurance reserves are growing at such a contract during the insurance period and reached its peak at the end of insurance.
Table 1. Features and cumulative risk life insurance
Parameter Risk insurance Endowment insurance
The purpose of protection in the event of the occurrence of certain risks for some period of time guaranteed the formation of savings and risk protection
The main risk of death survival to a certain age or a point in time
Death
Additional risks Accident
Disability
Critical Illness Accident
Disability
Critical illness
Insurance period 1 year (annually renewable insurance)
1 10-15 years (there are insurance options for 25-30 years) 10 years
The yield for insurance of 1 to 3-5 years, as a rule, the yield is not charged.
In case of insurance for long periods may be assessed a guaranteed yield on classic life insurance takes charge of a guaranteed return on savings under the contract
Perhaps the accrual of additional investment income (approx. 2% -5)
The main types of insurance term insurance in case of death.
Short-term insurance critical (deadly) diseases Mixed insurance.
Endowment insurance with a return of contributions or reserves in the event of death.
Life insurance in case of death.
Annuity insurance
Long-term and short-term insurance
Depending on the duration of the contract are distinguished:
term life insurance,
short-term life insurance.
No clear boundaries dividing. From practice to include all short-term insurance contracts for a period of one year. Sometimes life insurance for a period of 1 year to 3-5 years, also called short-term, to separate from the really long-term contracts concluded in several decades. The average duration of the contract of life insurance in the European countries ranges from 10 to 25 years. In the US, because of the peculiarities of different variants of popular tax life insurance, which are valid until the date of death of the insured.
Endowment insurance is always long-term. Risk insurance, is usually short-term, but there are options for term insurance in case of death for a period of 10-15 years, or 25-30 years. Therefore, risk insurance can not be regarded as a synonym for short-term insurance.