In modern life, more and more citizens understand that their own funds can be invested not only in bank deposits, but also in life insurance. After all, at the end of the insurance period, in addition to the sum insured, investment income is paid to customers. However, there are situations when you have to terminate the insurance policy in advance. And then what? The redemption amount of a life insurance contract is the amount that will be received by a client who prematurely severed his relationship with the insurer.
Parties to the contract
In order to work in the field of life insurance, the insurance company is required to have a license permit for this type of activity. The insurer must develop rules on the basis of which insurance agents or other financial intermediaries draw up insurance contracts.
Insurers can be both enterprises, institutions, firms, holdings, and capable individuals. For legal entities there are no restrictions on the type of activity or type of ownership. The objects of insurance in such agreements are team members, for which insurance premiums are paid by the organization. At the same time, if the insured employee wishes to terminate the insurance agreement, then according to the rules, for example, the Rosgosstrakh insurance company, the redemption amount of the life insurance contract will be transferred to the bank details of the team member.
The policyholder may also be an individual. The main requirement at the conclusion of the contract is the age of the client - at least eighteen years on the date of the agreement. At the same time, the policyholder can conclude insurance policies for third parties (children, spouses, parents). In this case, the age of the insured persons may not be less than one year. And at the same time, the insurance company may refuse insurance to a citizen if he is already eighty-five years old, even if he acts as an insured.
Contract validity
The insurance document is signed for any period by agreement of the parties and in accordance with the current insurance rules, as well as legal standards. When concluding a life insurance contract, the validity period, as a rule, is from five years and even for life, that is, until the client reaches one hundred years. During this period, the policyholder is required to make insurance payments monthly or quarterly in a lump sum payment for the year or the entire insurance period. Depending on the amount of premiums paid, investment income is accumulated in the personal account of each client. And upon termination of the contract or upon the achievement of a certain insurance event, the policyholder receives not only the insurance amount, but also investment income.
However, there are situations when the client needs to prematurely terminate the contract.
There are no funds to pay
When signing the insurance agreement, the client expects that he will be able to make insurance premiums in accordance with the insurance conditions. In situations where there is no financial ability to make another payment, the policyholder thinks about the possible early termination of the policy and the receipt of the redemption amount of the life insurance contract. This amount consists of a portion of insurance payments already made. And such a step will lead to a loss of invested funds.Therefore, before breaking off relations with an insurance company, you should use the grace period for life insurance or make changes to the existing contract with a decrease in the amount of the contribution.
Early paid contract
As an option to maintain relations with the insurance company, you should consider changing the status of the current contract. Many insurers have developed a system for policyholders, which allows you to make it paid before the end of the term. Why do we need the redemption amount of a life insurance contract if there is a practical possibility not to pay more payments and remain insured until the end of the contract agreement, albeit for a lower insurance amount.
Early termination of the agreement
If, for a number of reasons, the policyholder decided to terminate the contractual relationship with the insurance company, he is obliged to write a written application for termination of the policy. Upon receiving such a request from the client, the insurer is obliged to calculate the redemption amount of the life insurance contract. This is the amount of insurance payments made, minus expenses of the financial institution for conducting business.
Foreclosure Amount Determination
When signing the documents, the insurer together with the policy issues an application with a table of guaranteed redemption amounts for the life insurance contract. An example of calculating this amount depends on the payments made and the duration of the agreement. So, if the contract is valid for seven years, and one hundred and ninety thousand rubles are paid, the redemption amount will be a little more than sixty percent, namely 117 thousand rubles.
In some contracts, the redemption amount of a life insurance contract is the sum of two components: part of the contributions paid and part of the accumulated investment income. Although there are situations when the final amount for payment does not increase by the amount of profit received. This applies to those contracts that are terminated in the first two years of validity.
Given the seriousness of financial losses, when applying for termination of the contract, all possible options should be reviewed to keep the contract in force. Indeed, this in the future may become a serious financial aid for solving pressing problems.