Childhood Insurance

Target group

The Childhood insurance is designed for people who want to provide financial assistance for their children’s future development when the children reach a specified age. The obvious advantages of this type of insurance over bank deposits are its high yield and risk element.

Insured person

The Insured and the Insuring party are the same person. Usually they are the parents or close relatives of the child in whose favour the insurance is taken out. The Insured shall be a natural person aged between 18 and 60 as of the date of the beginning of the insurance cover, and they should not be over 75 upon the expiration of the insurance policy.

Beneficiaries

The Beneficiary is a child up to the age of 17, specified by the Insuring party, who will be between 18 and 25 upon the expiration of the insurance policy.

Risks covered

Death of the Insured during the term of the insurance cover

Additional risks

In view of the fact that some risks that are not covered by the main insurance policy may occur during the term of the agreement, the followed additional covers are offered:  

• in the event of death or permanent disability of over 50% caused by accident the Insured receives compensations;
• in the event of permanent disability caused by accident or illness the Insured is released from the obligation to pay the due premiums.

Term of the insurance

The agreement is concluded for a term of at least 5 years; based on the provision related to the child’s age at the end of the insurance cover, the maximum term of the insurance is 25 years.

Insurance premium

The annual premium is determined upon the conclusion of the agreement. The premium may be paid in installments – biannually, quarterly or monthly. Changes to the installments may be made once a year at the request of the Insuring party.  In the event of default on any of the premiums the Insurer may terminate the agreement if less than 2 years have passed since it became effective, or transform in into a Paid Agreement if more than two years have passed.

Insurance payment

• In the event of an insured risk the Insurer releases the Insured from his obligation to pay the premiums as of the first maturity of the premium/premium installment following the death
• Upon the expiry of the insurance cover the payment is calculated as follows: Payment = Sum insured as per the List/the Sum insured of the Paid agreement + Indexation + Bonus – Overdue premium – Due premium installments- Loans under the agreement
• The payment upon the expiry of the insurance agreement is made regardless of the fact whether an insured event has occurred or not.

Other terms

• A Paid Agreement is an agreement under which no new premiums are due. On the grounds of the premiums received by a certain point, provided at least two years have passed since the agreement became effective, the Insuring Party may request the transformation of the agreement into a Paid Agreement, upon which the Sum Insured shall be reduced. The Insurer may transform the agreement in the event of default on a due premium after he notifies the Client about his decision. Payments on a Paid Agreement may be renewed within one year after it has been transformed, provided the due premiums and interests are paid;
• Surrender value – the amount the Client may receive upon the termination of the agreement. Right to surrender occurs two years after the agreement enters into force;
• Bonus – an additional sum (resulting from the investment policy of the Insurer) that is transferred to the batch of each agreement annually. The accrued Bonus may be withdrawn at any time during the term of the agreement;
• Indexation – the increase in the Sum insured and the due premium installments to offset the inflation, but no less than 5%. A proposal for indexation is made to the Insuring party once a year and he may accept it or refuse it, in which case the Sum insured is not changed.

Taxation

• at the beginning of the agreement – no tax relief;
• upon the expiry of the term of insurance – the Insurance payment is exempt from  taxes
• the Bonus is exempt from  taxes in all cases