When life takes an unexpected turn through injury or long-term illness, the financial impact can be devastating. Risk life insurance emerges as a vital safety net, offering not just lump-sum payments but also the possibility of regular annuity payments to help navigate challenging times.
“Insurance can cover a wide range of life’s risks. When considering coverage, it’s essential to start with major risks. Protection against long-term disability and loss of self-sufficiency is more crucial than compensation for minor injuries,” explains Michal Korejs, Product Director at NN Life Insurance.
The scope of coverage is comprehensive, with policies typically including “death, disability, serious illnesses, injury or its permanent consequences, work incapacity, care, and hospitalization,” according to Milan Káňa from Kooperativa Insurance. For instance, a 50-year-old individual with a net income of 50,000 CZK could see their income drop to 22,700 CZK in case of third-degree disability.
A notable development this year is that long-term care insurance premiums of up to 48,000 annually can now be deducted from the tax base. The average client pays around 1,500 CZK monthly, which can provide a 35-year-old with one million crowns in coverage for death, third-degree disability, and serious illnesses, plus a lifetime annuity of 20,000 CZK monthly for long-term care.
However, potential policyholders should be aware of exclusions, particularly pre-existing conditions and psychological illnesses. Insurance companies may also deny claims in cases of intentional criminal acts or reduce payments by half if accidents occur under the influence of alcohol or drugs.