Life insurance & Investment

It is a financial protection for your loved ones that provides benefits in the event of death or serious illness. Life insurance is the best way to protect your family financially when you are no longer able to provide for your family. ERGO offers various types of life insurance, including risk insurance and universal insurance, which can also include a savings function – this is term life insurance. This service is mostly chosen by customers who have financial obligations and care for their loved ones. If you have obligations to the bank, you can choose a variable sum insured that gradually decreases (such an option is available in risk insurance).

In the long run, money depreciates, so investment life insurance offers an opportunity to invest funds for those who have their own savings goals, want to cover inflation, take into account possible fluctuations in earnings. One way to save money is to entrust the amount you invest to the insurance company’s investment professionals. You can actively participate in the investment process of term life insurance premiums by switching funds. You can choose investment directions according to the level of risk or according to the markets (groups of companies or countries) in which the funds operate.

The third-pillar pension scheme is voluntary accumulation for additional pension through pension funds. Life insurance includes coverage against death and additional benefits subject to certain conditions, along with the possibility of saving. Although both products, i.e. both the investment life insurance and the third-pillar pension scheme,  are long-term savings products with many similarities, there are several key differences. The life insurance service allows you to combine two goals: to have protection (change it depending on the needs during the year) and to save by investing. It is usually desired to receive the accumulated amount at retirement age, thus, the expiry of the contract is usually associated with this term. If you are saving for another purpose, you can choose the term according to your individual wishes (for children, for securing an inheritance, for a purchase, for the down payment for residential mortgage, for a long trip, etc.). If the objectives of saving change and you do not want to wait until the expiry of the contract, withdrawal of a part of the capital or the payment of the entire accumulated capital by terminating the contract is possible (withdrawal of a part or all of the funds before the expiry of the term may affect the application of the personal income tax relief. For more information, please contact an ERGO consultant.

The best way to save for retirement is to choose funds with low fees, stable returns and good terms. The criteria on which the accumulation of the pension depends are as follows: return on investment, level of risk, administrative fees and the reliability of the manager. Savings for retirement can also be started by your employer, choosing an insurance contract as a motivation tool used in the company. Another way to save for retirement is to create your own individual contract, as you have the ultimate goal of taking care of your future, greater control, and can choose an investment strategy that matches your goals and risk tolerance.

Yes, it is worth it because retirement savings provide financial stability and additional income in old age. The pension is the main, and often the only, source of livelihood for older people. It is argued that in order to live with dignity in retirement, you should have at least 70-80% of your former income. Unfortunately, it is estimated that, on average, the pension paid by the State Social Insurance Fund Board under an optimistic scenario is likely to be lower than a half of the gross salary. Therefore, any amount of additional income accumulated by yourself in old age can be very significant – even if you receive a very small periodic or one-off benefit. The earlier you start saving, the more funds you will accumulate. If by the time you stop working and want to maintain your lifestyle, you must have a sufficient source of income to cover the quality of life and health costs. Investing can provide an opportunity to increase the value of your property over time. Of course, saving for retirement can be difficult if you are young or on a tight budget. But even small contributions can provide significant long-term benefits and help you better prepare for the future.

Individuals who are self-employed must take care of their pension accumulation independently. Self-employment does not always ensure a fixed monthly or annual income, so it is important to choose the right amount of savings. And don’t forget coverage – that’s exactly why it's important to have a financial backing, an accumulated amount for an emergency.

We pay out the accumulated funds under the term insurance and investment insurance contracts upon the expiry of the insurance period. In case of investment insurance, this is the accumulated capital, in case of guaranteed interest life insurance contracts, it is the sum insured.
The policyholder can withdraw a part of the accumulated amount during the course of the contract or at the termination of the contract – such a contract may be subject to taxation, so we recommend that you consult an insurance specialist regarding the terms of your contract.

The cost of life insurance coverage is calculated on the basis of the person’s age, work/and leisure risks, the sum insured and insurance provision.
The minimum amount from which you can start saving and investing is EUR 50 per month. We invite you to apply for an offer suitable for you, where you will see both the cost of your insurance coverage and the preliminary accumulated value according to the chosen investment risk tolerance.

We select investment directions for life insurance customers using data from Morningstar, a global leader in investment research.
Our customers can invest in all major financial markets of the world in some of the best funds investing in those markets. For your convenience, we offer you to choose from three ERGO investment programmes and, depending on your needs, invest moderately (without assuming a high investment risk), focus on growth or choose a balanced portfolio of investment directions. Current information on investment directions and programmes can be found here. You can familiarise yourself with ERGO Investment Policy here.
 

The term life insurance for children helps to provide for the start of your children’s independent life. You can save money for your children’s studies or for a necessary large purchase, such as a down payment for your own home. At the same time, you can make it easier for your children to be financially secure in the event of loss of a breadwinner, accidents or illness.

Additional pension accumulation is an opportunity to accumulate additional funds for your pension. ERGO life insurance gives you the opportunity to save even in the relatively short time before retirement because you can choose a moderate strategy investment programme, the majority of financial instruments of which are bonds. If you are saving for retirement and are interested in additional savings for retirement, consider the need for additional insurance contracts. For more information on pension accumulation, contact an ERGO consultant.

Pension annuity is when a pension benefit is paid to a member of the pension fund on a monthly basis for life, the entire risk of its payment rests with the payer of the pension annuity, i.e. the State Social Insurance Fund Board. The State Social Insurance Fund Board guarantees that the monthly payments will not decrease throughout the payment period.
The participant may choose one of three types of annuity: a standard annuity, a standard annuity with a guaranteed payment period, or a deferred pension annuity (with periodic payment). For more information: read the Republic of Lithuania Law on the Accumulation of Pensions.

The price of a pension annuity depends on the chosen type of annuity, the amount accumulated in the pension fund, the interest rate and other factors. You can find more information about pension annuities, their payment, a calculator, and information about the management of the annuity fund on the website of the pension annuity payer:

• Information on payment of pension annuities
• Calculator of pension annuities