Investment life insurance, often referred to as IŽP, is a product that combines insurance coverage and an investment component in one contract. Part of the payments may be used to cover insurance risks and part may be invested according to the rules of the specific contract.
How the payment is divided and what costs are charged depends on the product. When evaluating a contract, it is therefore important to look at the specific fees and insurance conditions, not only at the monthly payment amount or an illustration of future value.
Insurance Component
The insurance part may cover risks such as death, disability, or other agreed events. The scope of coverage is not automatic: it depends on additional coverages, insured amounts, exclusions, and the conditions of the specific contract.
Investment Component
The investment part may be linked to funds or other investment options listed in the contract. The value of the investment may increase or decrease. Future returns cannot be considered guaranteed unless the contract explicitly includes a specific guarantee and its conditions.
Why Fees Are Important
In a long-term product, entry, administrative, risk, management, or other costs can have a significant impact on the result. The customer should know how much of the payment goes toward insurance coverage, how much is invested, and what fees are deducted.
Before Changing or Cancelling a Contract
An older contract should not automatically be cancelled simply because another product exists. Before making a decision, it is necessary to know the surrender value, possible costs, current coverage, health consequences of arranging a new contract, and what would be lost or gained by making a change.
This article provides general information and is not individual financial or insurance advice.