“Poles are spending more on life insurance. Interest in protection and accident insurance products is steadily growing. This is positive because we should think of life insurance as a financial cushion in case of our death or serious illness. Especially since it is difficult for a family to sustain itself on a single income in such situations. Poles do not have savings and are heavily in debt,” said Jan Grzegorz Prądzyński, President of the PIU Management Board. “Simultaneously, the share of savings and investment products is decreasing. This is a negative trend, especially considering demographic changes. Insurance is a long-term savings instrument, especially for low and middle-income individuals. It can effectively help build a financial cushion for old age,” he added.
According to PIU data, the replacement rate of salary by pension in 2022 was 56.6%. When we translate this into average earnings, it means Poles will receive half of their salary upon retirement. This is insufficient to live with dignity and finance growing health needs related to age. PIU highlights this issue in its latest report "Poles and Risk – How We Insure Ourselves. The Insurance Gap in Poland." Based on ZUS (the Polish public pensions house) data, PIU found that Poles will live in good health for only half of their retirement.
The PIU analysis also indicates what the insurance sum in life insurance should be. It should not be lower than the amount of outstanding liabilities and should facilitate family support for several months to even a few years, depending on the primary breadwinner's earning potential. In the event of a serious illness, the benefit amount should cover additional treatment, rehabilitation costs, or a job change to a less demanding one. Assuming average values of Poles' salaries, debts, and savings, the average life insurance sum in case of death should be about PLN 330,000 (~EUR 76,390).
“Building family resilience in case of death or serious illness and long-term savings is crucial. Let's not forget that life insurance is also a source of long-term capital, more resilient to various crises and economic cycles compared to bank capital. This is why good conditions for insurance development were created in Western Europe so that the capital invested in these products acts as an anchor for the economy. Thus, reducing the gap in this area not only financially strengthens Polish families but also brings real benefits to the economy. We would like tax incentives for life insurance to be implemented, as in Western European countries. Employers could include the group policy paid for employees as tax-deductible expenses, thereby reducing their taxes. Employees could be exempt from income tax related to the financial benefit they receive from group insurance,” says Jan Grzegorz Prądzyński.
12491 views
