People to combine life insurance and investment income
The Russian market will offer a new option for long-term investment — unit-linked life insurance (ULLI). One and the same contract will stipulate terms for a client’s standard life insurance and management of the client’s investment in units of a unit investment fund (UIF). This law has been adopted by the State Duma of the Russian Federation.
The policyholder’s assets will be managed by the UIF’s management company or the insurer itself provided that the latter is licensed to do so. The ULLI contract will specify the percentages of the client’s funds to be invested and to be paid for life insurance. Insurers will be able to offer the new product beginning from 1 January 2025 after the relevant law becomes effective.
The UIF’s units being the client’s investment instrument under the ULLI contract will be owned by the client who will be thus protected against the risk of bankruptcy of both the insurer and the management company. The rights of UIF unit holders are protected by the law on investment funds.