In addition to their insurance functions, some types of insurance also offer an auxiliary connection function. It is a so-called reserve-creating insurance, which means that during their permanent creation a reserve for future insurance benefits, which we must consider as a means of savings.
Such insurance products include the following:
- Insurance in case of death or life (capital life insurance)
- Pojitn pro ppad must
- Dchodov pojitn
- Univerzln (variabiln) ivotn pojitn
- Investin life insurance (life insurance connected to investment funds)
- Wedding and vnov pojitn.
Generally speaking, these are all products that combine the payment of insurance benefits with up to a certain age. Because we will deal with these products in more detail in a special chapter, we will only mention their characteristics in terms of connections. The first important approach is that not all invested funds (in the terminology of insurance policies) are valued, but only the amount that remains after deducting the price of risks covered by the insurance policy and the insurance company’s costs for concluding and managing insurance contracts. Therefore, if the insurance companies say that they wrote in the input (according to the profit) in the amount of 7%, only the invested funds are worn out. In addition, they last for more than a year, no positive reserve is created and there is something to appreciate. In this phase, the insurance company washes out the costs associated with the creation of the insurance policy, especially the high commission from the seller. If the goal is to save us as appropriately as possible, we should generally avoid value-added pensions through insurance products.
Due to the final restrictions on the location of insurance reserves, these types can be connected by a relatively safe coupling device. In addition, insurance companies guarantee a minimum appreciation of reserves (net of investment life insurance), usually in the so-called insurance technical years. In the case of endowment life insurance and pension insurance, a guaranteed appreciation of the pre-agreed insurance policy in the event of life and retirement is guaranteed. Maximln ve technically years mry it is regulated by the Ministry of Finance, which set it at 2.4% from 1 January 2004. Two insurance policies from the middle of the nineties can have this guarantee and 5%. When evaluating these countries, however, keep in mind that there are only a hundred pensions included!
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The safe input carries the usual disadvantage or not at all high
If we do not take into account the stated fees, the average return attributed to clients is linked to the response available on the bond market, ie short and medium term. investment horizon. Thus, even if we do not sweat due to high fees, this product is not suitable for long-term savings.
In the stated statement does not apply entirely to investin ivotn pojitn. This type of insurance allows for an active choice of the ratio of return and risk of invested funds by choosing investment funds, into which the insurance premium will be paid differently. The price for the possibility of deciding on the return and the risk of savings is the absence of a guaranteed return. In the case of investment life insurance, we can see the advantage in transparency in comparison with classic reserve-forming insurance companies. Thanks to the existence of individual funds, where our deposits are kept and their placement in individual funds
we have a comprehensive overview of the actual carrying capacity of such forms of savings and the actual fees charged by the insurance company. Nevertheless, the disadvantage of spouses in high fees is significant. Revenues from reserve-forming insurance are subject to 15% tax. It is taxed upon payment of the insurance benefit, and the tax deposit in this benefit is reduced by the payment of the insurance during the term of the contract.
The attractiveness of this method of savings is slightly improved by a tax advantage that has been valid since 2001. The tax deposit for some of these insurance premiums can be reduced by a tax base of up to 12,000 crowns, if the following conditions are met:
- it is a bond for the event of life, death or life and retirement benefits (including their variants connected to investment funds),
- the policyholder is also an insured person,
- insurance period not less than 5 years,
- the payment in case of maturity will occur at the earliest in the year when the insured reaches the age of 60,
if there is an insurance policy in case of life, it must be at least 40,000 K and in the case of an insurance period longer than 15 years 70,000 K.
In addition, if the fulfillment of these conditions is exempt from personal income tax, the employer’s contribution and up to 12,000 crowns. This support for life insurance may compensate for some products
high fees, but only for a few conditions. For the first, in addition to the insurance in case of life, there is no other insurance (or only in a negligible amount), we have a high income so that its tax rate is 25%, and for the third we limit the insurance to only 12,000 crowns.
We have not mentioned the availability of funds through insurance products. In general, it can be low. These insurance policies can usually be taken out for a minimum of 3 and 5 years. If we want to achieve an interesting input, we should choose the duration, because it costs more than the insurance costs for concluding the contract, and if we want to force the deduction of the premium paid from the tax base, the term of the insurance period can be approached by ten years. If we need two funds, we have not agreed with the insurance company, we have a premium for a certain period of time (2 and 3 years) for sales, which may not correspond to the funds and especially in the first years does not cover or pay insurance. Technically, it is a created capital reserve, which is reduced by a certain sanction for termination of the contract. In addition, we have to deal with a certain amount of notice, not the sales will be paid. The sales tax paid and the insurance premium paid are taxed at a rate of 25%. If we have reduced our income tax base by paying insurance premiums, we will have to include this insurance premium as income in the following tax return.
Summary of the suitability and inadequacy of reserve life insurance
- guarantee of payment of insurance premium at the end of the insurance or guaranteed appreciation of the insurance reserve (does not apply to the investment life insurance),
- under certain conditions, the possibility of reducing the tax base on the payment of insurance and 12,000 crowns.
- very high fees, which are often hidden, reduce the input under the level of other computer tools,
- taxable income at a rate of 15%, in the case of temporary compensation even at a rate of 25%,
- high fees, which are mostly hidden and the insurance companies do not inform about them (does not apply to investment insurance and some variable life insurance),
- the insurance company invests the funds obtained very conservatively due to the long life of the insurance (does not apply to life insurance),
- deposits are not guaranteed by sttem.
Excerpts from the book:
1. dl: Bank deposit as a spoc product
ryvek is from the book“Personal and family finances, 2.aktualizovan vydn“vydan nakladatelstvm City Publishing, who published publications in the FINANCE edition such as:
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Investovn pro zatenky
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