CEO of “National Life Daatgal” LLC speaks about “Tenuun amidral” retirement insurance plan.
First of all, congratulations to your organization for adopting voluntary retirement insurance system.
Thank you. We analyzed for a long time to create a suitable plan for a domestic market, also aimed to provide retirement insurance that could allow policyholders to receive direct benefits from the plan. As a result, “Tenuun amidral” retirement insurance plan was introduced in this year. In January, cooperation agreement with State Bank which is the biggest regional bank with its more than 540 bank branches in Mongolia was one of the highlights of the month. We are happy to announce that “Tenuun amidral “retirement plan is available to purchase at any State Bank’s branch.
What’s special about “Tenuun amidral” retirement insurance plan? Who are the dedicated customers?
“Tenuun amidral” is for anyone who wants additional income sources besides their social insurance income, and citizens who aren’t covered by social insurance. For your information, since “Tenuun amidral” has been introduced, firms and business-owners expressed their interests to purchase it for their employees. A special feature of “Tenuun amidral” is that policyholders are allowed to choose the amount of pension payments, and it accumulates only in the policyholders’ accounts. In other words, “Tenuun amidral” can be interpreted as a comprehensive product which is a combination of bank savings, protection insurance and pension.
So does interest accrue on “Tenuun amidral”?
“Tenuun amidral” accumulates a cash value through policyholder’s premium and Mongol Bank’s policy interest rate. The most significant advantages of “Tenuun amidral” are risk protection, and total amount received can be exempt from incomes taxes. Thus, the policyholder’s real benefit couldn’t be just estimated by interest rate, but there’s actually more to receive. Risk protection means if policyholder gets into accident and becomes disabled, our company will be responsible for paying policyholder’s premium. Our primary responsibility is to prevent our policyholders from becoming unable to reach their financial goals due to unexpected financial losses.
What happens to the policy if the policyholder dies?
Not a few number of policyholders pass away before receiving retirement benefits. For “Tenuun amidral”, the policyholders have options to receive one time lump-sum payment, or series of equal payments at regular intervals. If the policyholder dies due to an accident, a beneficiary of the policy will receive twice the amount of retained premiums. And if the policyholder wants to, he or she can bequeath his/her retained premiums to other beneficiary.
When the policyholders can receive their pension payments or do they have to wait until they reach 55 or 60?
The advantage of “Tenuun amidral” is if the policyholder has paid his/her premiums for 5 consecutive years, the policyholder can receive his/her pension payment at any time. However, there is an option to surrender the policy before the 5th year, and the accumulated cash value will be returned to the policyholder.
When it comes to pension, many people think of Social Insurance as their first option. It’s interesting to know that there’s a retirement plan which is offered from private sector.
Life insurance is an essential tool in supporting an individual’s financial goals and stability. Mongolians do not worry about their retirement when they are young and employed. Most of the developed countries’ citizens are usually covered by voluntary retirement plan besides their social insurance, and their governments support it through tax policy. As a result, they can live independently without any financial problems after retirement unless they were not working. Today our country accumulate pension fund based on principle of solidarity, and government is taking responsibility for over 200 thousand citizens’ pension. Due to recent government decree, average pension increased by ₮26,000, and became ₮283,000. In reality, majority of our elders have retirement loan, and are having difficulties to cover their daily expenses. We started to provide retirement insurance services since 2010, and we improved coverage of our retirement insurance plan; therefore, introduced “Tenuun amidral” retirement insurance plan this year.
Is there any other insurance companies which provide similar retirement insurance plan?
Currently, we’re the only one that’s authorized to provide retirement insurance services. There are currently 17 insurance companies in Mongolia, and 16 of them provide general insurance services, but we are the only insurance company that provides life insurance. According to law of Mongolia, insurance industry must be divided into two main sectors which are long-term insurance, and general insurance. Life insurance contract is made between insurer and policyholder for longer than one year, and life insurance products are different from general insurance products. Retirement insurance plan is a one type of life insurance. If 30 year old person make a contract for 30 years to receive pension payment at age 60, there’s an interval of 30 year; therefore, a life insurance company is known as long-term insurance company.
Thank you for taking your to give us interesting information about retirement insurance. Do you have anything more to say?
Retirement insurance is a smart investment move for young individuals. The dime, you save today for your retirement savings, can be your bridge to reach your long-term financial goals. Thus; your return on investment will be higher as earlier you start saving for your retirement.