Life insurance is booming in the Czech Republic
For many years, life insurance was the poor relative among insurance packages in the Czech Republic. However, today, more and more people are taking out life insurance policies here. Why do Czechs suddenly feel the need for it? Beatrice Cady investigates:
Today, Czechs are discovering the charms of life insurance, or as the paper Lidove Noviny says, how to make your death more comfortable for your relatives. Just last year, only 28 percent of the Czech population had any kind of life insurance-a surprisingly low figure, compared to Western Europe, but over the last twelve months, statistics have begun to rocket.
This is over 10 years since the fall of communism, so why have Czechs taken so long before beginning to think about the future of their relatives after their death? I spoke to Pavel Vlasak of Ceska Zivotni, a branch of Ceska Pojistovna which specializes in life insurance policies. Today, the monthly cost of life insurance ranges from 600 to more than a thousand crowns, about a tenth of the average wage, and life insurance is not yet tax-deductable. However, this situation could soon change, as Parliament should be passing a new law by the end of this year. This law would make it possible to deduct life insurance contributions from income tax, the way it already works for retirement pensions.
According to a survey by Lidove Noviny, more and more Czech entrepreneurs, state officials and show-biz celebrities are becoming conscious of the financial value of their health. Most of the people Lidove Noviny interviewed, who are all between their fourties and sixties, had only subscribed recently, less than five years ago.
Surprisingly enough, most of them seemed a bit embarrassed to admit that they had taken out a policy. For example, they said they had to get a life insurance, either because it was compulsory in order to get a mortgage, or because it was part of their wider insurance package, or because they needed to open a saving´s account. Nearly all of them added that subscribing to a life insurance policy in no way meant they were afraid of dying or were expecting to do so in the near future! For those, on the contrary, who did not have life insurance, the reasons ranged from sheer ignorance or apathy to a sense that pension insurance would be enough. Pavel Vlasak explains: