Every life is unique. Most people cannot even imagine their most important moments without their loved ones. The milestones that most characterise our lives, such as marriage, the birth of a child and the purchase of real property, are also the moments when Slovenes decide to take out life insurance. However, according to Zavarovalnica Triglav's data obtained between 2014 and 2018, more than a quarter of policyholders insure their lives without carefully considering it. That many opted for whole life insurance with a minimum sum insured of EUR 10,000, which is not enough to overcome the financial burdens of the most important persons in the life of the insured when the worst happens.
On the Day of Remembrance for the Dead, we should also think about protecting our own lives and the financial security of those who are with us every day. Zavarovalnica Triglav, therefore, urges individuals to ask less pleasant questions and think about what would happen to their loved ones if the worst happened to them. Data show that more than a quarter of policyholders have whole life insurance with a minimum sum insured that is four times less than the recommended amount.
At least three times the annual salary
Most often, people make life insurance decisions at a milestone in their life, thus providing for the financial security of their loved ones in the event of their death. “When taking out life insurance, it is important that the individual not only views it as an obligation, but also carefully thinks about financial security, which will be ensured by making a prudent decision on the appropriate sum insured. According to the recommendations of the Slovenian Insurance Association, the sum insured should be at least three times the annual net salary of the insured. Taking into account the average net salary in Slovenia, the sum insured for this purpose should be at least EUR 40,000, ”explains Andreja Pelc, Executive Director for Life Insurance of Zavarovalnica Triglav, adding: "But this is the sum insured that would be sufficient to compensate for the loss of income for the minimum recommended period of three years. However, this does not cover any financial debt such as loans, which must be added to the calculation."
According to Zavarovalnica Triglav, it is best to take out whole life insurance as soon as the need arises – that is, when in the lives of individuals those who are financially dependent on them appear (a spouses, child) or when they commit to long-term financial obligations (e.g. taking out a loan to buy real property). According to the Company's data, Slovenes most often insure themselves during their active employment period, since the average age of insured persons between 2014 and 2018 was 38 years. The amount of the insurance premium also depends on the age and health of the insured, which means that younger and healthier individuals pay less for the same sum insured.
The average amount of sum insured paid out is also too low
Between 2014 and 2018, the average age of a deceased person with whole life insurance was only 48 years. Of these, 82% died as a result of an illness and 18% because of an accident. The average sum insured over the period amounted to EUR 32,000, which is still less than the recommended sum insured.
An incentive to think about insurance and talk about the most difficult issues
Zavarovalnica Triglav encourages people to consider life insurance through its Let's Ask Life campaign. As part of the campaign, Zivljenje.triglav.si was set up, where individuals can learn more about the importance of life insurance, take a test to see how risky their lives are and calculate, by using the online calculator, what their sum insured should be in order to provide for the financial security of their loved ones.
Whole life insurance is only one of the important aspects with which people can provide for the financial security of their relatives and make it a little easier for them at the time of loss. Apart from that, it is advisable for policyholders to safely keep all the documents that their relatives would need, to make a list of all their property and, last but not least, to draw up a will. This is the only way they can take care of their loved ones in difficult times and help them avoid some social and legal ambiguities as well as to focus more on what matters most at that moment – mourning, according to an in-depth story entitled When the Worst Happens and published on the Everything Will Be Alright portal. For anyone experiencing the passing of their loved ones, tips are presented in a user-friendly manner to help them in taking care of compulsory documentation during this difficult time and in having the sum insured paid out by the insurance company.
Whole life insurance between 2014 and 2018 in Zavarovalnica Triglav in numbers
- 38 years is the average age of people who take out life insurance.
- 27% of people who take out a whole life insurance policy opt for a minimum sum insured of 10,000 EUR, which in most cases does not provide the necessary financial security for their loved ones.
- The sum insured should be at least equal to the sum of three times the annual net salary and the amount of the financial obligations of the insured person.
- 48 years was the average age of insured persons who died during the insurance term.
- 32,000 EUR was the average sum insured paid out in the event of death.
- 82% of all sums insured paid out were related to an illness.
- 18% of all sums insured paid out were related to an accident.
