Generally, “life insurance” in Finland encapsulates pension insurance of individuals, health insurance and as well as accident insurance. However, an ordinary meaning of life insurance in Finland means insurance policy covering the life and death of the policyholder.
In this sense, Life insurance is a type of insurance contract between an insurer and a policyholder. It is a legally binding contract that pays a death benefit to the policyholder’s beneficiaries upon his death. A life insurance policy guarantees the insurance company pays a sum of money to certain beneficiaries when the he dies in exchange for the premiums of the policyholder during his lifetime. It is a class of insurance that pays out a sum of money either on the policyholder’s death or after a certain period of life.
Similarly, for a life insurance policy to remain in force, the Policyholder must pay premium in advance. When the he dies, the policy’s beneficiaries will receive the policy’s face value, or death benefits.
Life insurance institutions in Finland offer many kinds of insurance policies for life insurance. The compensation is paid as a lump sum. And the compensation amount is annually determined by the Ministry of Social Affairs and Health. Also the amount of indemnity substantially depends on the age of the employee. And also the numbers of children of the employee. Meanwhile, in the event the cause of death is an accident, the compensation will increases by 50%.
Generally, if the policyholder dies at below the age of 50 years, the spouse’s basic compensation is 16 720 €. And the rise by 7 540 € for every dependent child below 22 years of age.
Factors that influence costs of Life Insurance Premiums in Finland
- Age: This is the most important factor. The age of the intending policyholder determines the cost of premium to a very large extent. This is because life expectancy is the biggest determinant of risk for the Insurer. The younger the policyholder, the lower the premium.
- Lifestyle: Dangerous lifestyles or high risk jobs can make premiums more expensive.
- Gender: the gender of the policyholder influences the cost of premium. For instance, because women statistically live longer than the men, they generally pay lower rates than males of the same age for same category of life insurance policy in Finland.
- Smoking: Persons who smoke are at risk of many health issues that could shorten life. And increase premiums. This is in line with the aphorism that smokers are liable to die young.
- Driving record: A history of road traffic violations or drunk driving can increase the cost of life insurance premiums in Finland.
- Health: The presence of any health risk factors will generally increase your premiums
- Family medical history: Life insurance applications usually require personal and family medical history and as well as beneficiary’s information. And if you have evidence of major genetically inheritable disease in your immediate family, your risk of developing certain conditions is much higher and will increase the cost of premiums.
Benefits of Life Insurance
- Payouts are tax-free. Death benefits are paid as a lump sum and are not subject to federal income tax because they are not considered income.
- Dependents don’t have to worry about living expenses.
- Makes provision for Funeral expenses which can be significant and mind blowing but can be taken care of with the policy.
- It acts as a savings plans.
Who needs life insurance in Finland
Life insurance in Finland is most useful for people who need to provide financial security for a spouse, children, or other family members in the event of their death. Life insurance death benefits, depending on the policy amount, can help beneficiaries pay off a mortgage, cover college tuition, or help fund retirement. Permanent life insurance also features a cash value component that builds over time.
Life insurance is available to anyone, but the cost or premium level can differ considering the risk level an individual presents on the basis of factors like age, health, and lifestyle. Some category of persons who may need life insurance includes;
- Young adults whose parents secure private student loan debt or co-signed a loan for them.
- People with pre-existing conditions such as diabetes, smoking or cancer. Note, however, that some insurers may deny coverage for persons with these condition or charge very high premiums on them.
- Businesses with key employees
- Parents with little children
- Adults who own property together whether married or not. So that if the death of one adult would mean that the other could no longer afford loan payments, upkeep, and taxes on the property, life insurance will step in to help.
- Parents with special-needs adult children
- Married pensioners
- Wealthy families who expect to owe estate taxes. The insurance policy will provide funds to cover the taxes and keep the full value of the estate intact.
- Families who can’t afford burial and funeral expenses. And so on
Group life insurance in Finland
This is the type of life insurance policy that covers a particular group of people. This is in contrast to individual life insurance policy that only a person. Almost every employer in Finland pays for group life insurance on behalf of the persons in its employment. The Finnish name for group life insurance policy is ryhmähenkivakuutus.
The group policy compensates the family after the death of a spouse or the legal guardian of the children. However, to receive the benefits the employer or one of the beneficiaries must submit a claim. The mode of making claims is contained in Finnish Workers’ Compensation Center.
Interestingly the insurance is valid during work and leisure time and up to three years after the last employment ended.
Life Insurance Companies in Finland
In Finland, life insurance business is carried out by accredited life insurance company or a registered insurance association. These authorisations are granted by the FIN-FSA – Financial Supervisory Authority. The current database of all Finnish life assurance providers is available at the FSA site. There were 9 major Finnish providers as of January 2021.
Generally, “life insurance” in Finland encapsulates pension insurance of individuals, health insurance and as well as accident insurance. However, an ordinary meaning of life insurance in Finland means insurance policy covering the life and death of the policyholder.
In this sense, Life insurance is a type of insurance contract between an insurer and a policyholder. It is a legally binding contract that pays a death benefit to the policyholder’s beneficiaries upon his death. A life insurance policy guarantees the insurance company pays a sum of money to certain beneficiaries when the he dies in exchange for the premiums of the policyholder during his lifetime. It is a class of insurance that pays out a sum of money either on the policyholder’s death or after a certain period of life.
Similarly, for a life insurance policy to remain in force, the Policyholder must pay premium in advance. When the he dies, the policy’s beneficiaries will receive the policy’s face value, or death benefits.
Life insurance institutions in Finland offer many kinds of insurance policies for life insurance. The compensation is paid as a lump sum. And the compensation amount is annually determined by the Ministry of Social Affairs and Health. Also the amount of indemnity substantially depends on the age of the employee. And also the numbers of children of the employee. Meanwhile, in the event the cause of death is an accident, the compensation will increases by 50%.
Generally, if the policyholder dies at below the age of 50 years, the spouse’s basic compensation is 16 720 €. And the rise by 7 540 € for every dependent child below 22 years of age.
