What is executive insurance?
A pension savings device, which allows an employed/self-employed colleague to save for retirement age, in order to generate a future old-age pension for himself. The purpose of the managers’ insurance is to generate future savings in an insurance fund, while integrating an insurance component into the savings device.
Important highlights for executive insurance
- There are many types of new and old executive policies, with a wide range of advantages and disadvantages, among them: policies with a guaranteed annuity coefficient, policies with a guaranteed return, policies with capital components, and more. Despite the tendency to think that most of the managers’ policies on the market have the aforementioned advantages, the reality is the opposite and in most cases none of these advantages exist.
- A guaranteed annuity factor which is defined as the main advantage of executive insurance exists for colleagues who joined the executive policy until 2013 only.
- In the executive insurance program, beneficiaries can be defined differently from a pension fund, which grants a survivor’s pension to survivors only (spouse and children up to the age of 21).
- Their coverage can be customized in the managers’ insurance, without being subject to the regulations, unlike the pension fund.
- The insurance companies allow the member to make a guaranteed annuity factor in this product, over the age of 60 even today.
Lamda experts’ tips for executive insurance
- Executive insurance is a complex pension product, which is suitable for part of the population, as a basic product or as a supplementary product to the pension fund. Before purchasing a pension product of this type, you should consult with an expert with a pension license, in order to understand whether we need it.
- It is possible to dispose of capital parts, which are funds deposited until 2008, which can be withdrawn once after the age of 60, into a provident fund, without prejudice to the conditions. This action will in most cases provide the insured with a significant reduction in management fees, and the possibility of managing his funds directly in a provident fund, which offers a wide variety of investment alternatives, unlike executive policies.
- When moving executive insurance, guaranteed annuity factor will be canceled automatically. There are cases where there are many benefits to doing this. According to the law, in order to perform this type of action, one must consult with a licensed pension consultant.