Personal insurance is one of the most effective ways to protect and recover damages arising from harm to human health or life. In accordance with Article 4 of the Federal Law of the Russian Federation “On the organization of insurance business in the Russian Federation”, the personal interests are the property interests of the insured person, which are related to:
- with life insurance, pensions (the survival of the insured person to a term or a certain age, death, the onset of other events in the life of the insured citizens);
- accident and illness insurance, medical insurance (harm to health, life of citizens; provision of medical services to them).
One of the main branches of personal insurance is life insurance. This type of insurance provides insurance benefits in the following cases:
- survival of the insured person until the age specified by the insurance contract or until the expiration of the insurance period;
- death (death) of the insured person;
- expiration of the insurance contract;
- disability (permanent);
- pension payments (annuity);
- other cases.
Life insurance includes a complex of types of insurance, where the object of insurance is the life of the insured person. Since a person’s life does not have a material assessment, insurers are guided by the insurer’s income when determining the insurance amount. Therefore, the object of insurance protection is more likely the income of the insured than his life. A life insurance policy is valid for a period of at least one year.
Life insurance is divided into two types: endowment and risk insurance. In the classic (risky) insurance option, the policyholder’s money covers insurance risks and is not returned after the end of the insurance period.
Endowment life insurance combines two functions: risk and savings. Upon the occurrence of such insurance risk as “surviving to a certain age”, the policyholder shall be paid full insurance coverage in the amount of the insurance amount established under the insurance contract. Upon the occurrence of such insurance risk as “death of the insured person”, the beneficiary is paid insurance coverage in the amount of the insurance amount established under the insurance contract.
The policyholder concludes an insurance contract with the insurer for a certain period of time, at the same time he appoints the insured person, beneficiary and indicates the total amount of the insurance sum that the policyholder plans to accumulate for this period. The insured person (beneficiary) can be both the policyholder and any other individual.
This type of endowment insurance is similar to a bank deposit, with the only difference being that a sum is paid to the bank at a time, and in insurance the policyholder will save it for the entire agreed period in the insurance contract. In the event of an insurance event (death of the insured person) at any stage of saving and accumulating funds, the insurance amount is paid to the beneficiary in full.
The term of accumulation is determined by the insured himself within the duration of the terms provided by the insurer. The insured person (beneficiary) at the end of the term of the insurance contract receives a saved amount with accrued interest on the insurance premiums paid. In accordance with Article 6 of the Federal Law of the Russian Federation “On the organization of insurance business in the Russian Federation”, interest is part of the investment income that the insurer received from the reasonable investment of its insurance reserves.
Today, insurers offer a variety of options for cumulative life insurance, which are perfectly combined with insurance against serious illnesses, accidents and other types of insurance.
The policyholder has the right to terminate the accumulative insurance contract, with full refund of insurance premiums, if this condition does not contradict the essential conditions in the life insurance contract.
In life insurance, pension insurance, which has the nature of accumulative life insurance, but is tied to the retirement age of the insured person, should be singled out separately. If the insured person survives to retirement age, insurance payments are paid until the end of the life of the insured person in the form of a pension (life annuity). Payment is calculated from five to twenty years, or paid at a time. In the event of the death of the insured, the beneficiary will receive the remainder of the accumulated amount.
Accident and sickness insurance
This type of insurance refers to personal insurance, in which the insurer’s responsibility is to make insurance payment to the insured person in the following insurance cases:
- damage to the health of the insured person as a result of illness or accident;
- death of the insured person due to illness or accident;
- loss of (temporary or permanent) disability as a result of illness or accident, with the exception of insured events related to health insurance.
Accidents include an unusual, specific, unforeseen event that entails damage to the health of the insured person or sudden death due to external, sudden, violent exposure.
Temporary incapacity for work includes the inability of the insured (insured person), as a result of a health problem, to perform labor activities. The procedure for establishing disability, occupational disease and temporary disability is determined by the legislative framework of the Russian Federation.
Health insurance refers to the type of personal insurance, acts in the form of voluntary and compulsory insurance. By concluding a medical insurance contract, the insured person is guaranteed to receive medical assistance in the event of an insured event by financing preventive measures and accumulated funds.
Under contracts of various types of personal insurance, the amount of the insured amount is established by agreement of the parties. The insurance premium is calculated based on the size of the total insurance amount, tariff rates, insurance risks and the insurance period.
The personal insurance insurance tariff depends on the age and profession of the insured person, as well as on a number of other important factors that significantly affect the likelihood of an insured event.
A personal insurance contract shall enter into force on the day after payment of a one-time (or first) insurance premium, unless otherwise specified by the insurance contract.