Almost 60,000 Romanians have cancelled their life insurancepolicies since the beginning of the year, after the amountsaccumulated in their accounts had seriously shrunk as a result ofthe collapse of stock markets, while several other thousand peopletook back only part of the money from their insurance policies.Total amounts paid by insurers for policy redemptions in the firstsix months stood at 62 million euros, according to the data of theInsurance Supervision Commission (CSA). Redemption cases havedoubled compared with the same time in 2008.
"Most redemption cases involved unit-linked insurance, peoplepanicked thinking they were losing too much money with this type ofinsurance," Angela Toncescu, CSA chairperson told Ziarul Financiar.The amounts paid upon redemption account for about 10% of theassets on the unit-linked segment.
The biggest companies on the unit-linked market are ING,Allianz-Tiriac, Aviva and Eureko. The amount paid by insurers toclients redeeming their policies is lower than what the clientsinvested in these policies. Those who cancel their unit-linked lifeinsurance before the due date lose a great deal of the money theypaid, in some cases more than half of it. The problem here is thatthere are also many cases when the policies mature and clients getless money than they invested or their profits are below theinflationary rate.
"This year I cancelled a life insurance policy I took five yearsago because I needed the cash. Out of the 5,500 RON I paid in all,I only got back 2,200," says a client of an insurance company, whowanted to remain anonymous.
