We will not say anything new with the statement that the Bulgarian loves the deposit as a financial product. According to the latest data from the BNB statistics, banks in our country keep more than 8.8 million deposits with nearly BGN 75 billion in them. The reason is clear: the banking industry is the most reliable financial partner in view of its conservatism. However, the low risk also comes with a low yield, which this year fell to just over 1% average yield for over 2-year contracts, according to BNB data.
Subtract from it the cost of tax and the effect of inflation, and at the end of the contract period you will find yourself with less purchasing power of the funds than you invested at the beginning. And right here we can probably surprise you pleasantly – there is already a product on the market that allows for additional profitability, but also insurance protection.
Life insurance from DZI, related to an investment fund
It is an insurance-investment program with a low risk profile, which offers, on the one hand, protection of the invested capital and, on the other hand, an investment in the international markets with the corresponding profitability.
Specifically: “EuroHorizon 4” is a product that provides capital protection at the end of the contract term for the net invested amount*, a fixed minimum yield and the possibility of additional yield depending on the performance of the fund. The product provides insurance protection in the event of loss of life due to an accident.
The program allows you to accumulate a planned return of a minimum of 8% at the end of the contract term, as well as an additional up to a maximum of 60% of the net invested amount* depending on the performance of the fund. The duration of the insurance-investment program is a little more than 5 years, which provides a long enough period for good returns when investing in low-risk assets.
Enrollment under the program is until December 8, 2023, and the policies expire on February 28, 2029. In other words, the goal is to hold the invested amount until the end of the period. Of course, every depositor can also withdraw their funds earlier against a redemption fee.
Investment in global companies
The investment gives access to an international investment fund named Optimum Fund World Fix 100-3, managed by the management company KVS Asset Management, and its yield is linked to the performance of a basket of assets of a global selection of 30 companies with high market capitalization. Among them are leading companies from sectors such as Telecommunications, Healthcare and Biotechnology, Finance and others. Net investments are invested here, the cost of which is guaranteed and on which at least an 8% return is expected.
In addition to the pure investment, the one-time premium also includes a risk premium for life insurance. You choose how much to invest, with a minimum requirement of €2,500. The policy includes insurance protection in the event of death in the event of an accident, which amounts to the premium multiplied by three – up to 75,000 euros.
Of course, in the end it is important to talk not only about the income from the investment, but also about the costs. Each investment program has planned fees, which are duly described in its documentation. The introductory fee is in the amount of 3%, and when withdrawing funds before maturity in February 2029, a 5% redemption fee is deducted from the amount withdrawn. According to Article 565 of the Insurance Code, a contribution to the Security Fund in the amount of EUR 3.06 is also due for the entire term of the contract.
* The net invested amount represents the one-time insurance premium, reduced by the premium for the covered risk Death as a result of an accident (Risk Premium) and the introductory fee on the investment premium covering administrative.
** The material has an informational format, does not constitute investment advice, and is not solicitation or investment advice.