“Life” insurance policies with a savings or investment component play a significant role in personal financial planning and can provide additional funds later in life. This was commented on by Plamen Yalamov, Chair of the Life Insurance Commission at ABZ and Director of Strategic Development at Groupama Insurance, in an interview for the newspaper “Telegraph”.
Yalamov pointed out that three main groups of products are offered on the market. The first group comprises the classic savings “Life” insurance policies, which are concluded for a long term—usually between 5 and 30 years, and sometimes up to 40 years. They combine insurance protection and a savings component with a guaranteed interest rate of between 0% and 0.75%. In the event of good investment results by the insurer, additional interest may also be credited, but it is not guaranteed.
The second group includes insurance products linked to investment funds. In their case, returns are not guaranteed, as the funds are invested in portfolios with different levels of risk. Potential returns may vary significantly, and with active management and a sufficiently long investment period, it is possible to achieve average annual results in the range of 5–10%.
The third type comprises single-premium products, under which the customer makes a one-off investment of a specified amount—for example, EUR 2,000—into a product linked to an index, shares, or other financial instruments. For the duration of the contract, usually 5, 7, or 10 years, the invested amount is guaranteed, and additional returns above it may be achieved in accordance with the terms of the policy.
Savings “Life” insurance policies also provide a tax relief of up to 10% of the annual tax base when the contract is concluded for a minimum term of 15 years. The accumulated funds are non-seizable, meaning they are not subject to attachment in enforcement proceedings. In Bulgaria, between 50,000 and 100,000 people hold such products.
-370x270-3.png "News image")
 (002)-370x270-2.jpg "News image")
