330 thousand PLN – this is the average amount of life insurance in the event of death. It takes into account the average value of remuneration in the enterprise sector, PLN 7,444.39 gross (in 2023, in accordance with the announcement of the President of the Central Statistical Office), the average debt of Poles and their savings. However, this amount does not include death benefit and funeral allowance, which can be treated as funds to directly cover additional costs.
According to experts, the money that will be available under the life insurance policy should correspond to at least three years of the deceased person’s salary and be increased by the total value of credit obligations. The amount covered by the insurance should not be lower than the amount of the liabilities left. In addition, it should ensure the possibility of supporting the family for several months to even several years, depending on the earning capacity of the main householder.
Experts note that in 2023, over 409,000 people died in Poland. people. For comparison, a year earlier it was over 440 thousand, and in 2021 – 519.5 thousand, which was largely influenced by the pandemic.
In the event of a serious illness of the main earner, the amount of benefit paid under the policy should allow covering additional costs of treatment, rehabilitation or changing work to a less strenuous one.
Theory and practice
An insurance gap in life insurance occurs when the sum insured for the main breadwinner is set too low or when no life insurance policy is concluded at all.
According to PIU data, in 2023, 23.9 million Poles had life insurance, including 11.7 million under group insurance. That’s about 3.6 percent. less than a year earlier. The amount allocated for insurance nevertheless increased. It amounted to PLN 22.8 billion, by 6.2 percent. more than in the previous year.
According to a survey conducted by the Polish Insurance Association in July 2022, the amounts of individual life insurance estimated by insurance agents are most often in the range of PLN 100,000-150,000. PLN (29%) or over 250 thousand PLN (26%). The average is 192.6 thousand. zloty. The amounts of group insurance are most often set by insurance agents at PLN 50,000-100,000. PLN (44%) or 25-50 thousand PLN (38%). On average, this translates into the amount of PLN 80.7 thousand. zloty. Over 80 percent insurance agents also note that more than half of life insurance buyers (average response: 63%) also choose additional contracts, such as protection in the event of serious illness or inability to work.
This, according to PIU experts, shows that in order for the sum insured in the event of death to correspond to actual needs, it should be increased by 73%. Currently, it approximately corresponds to the average insurance sum taking into account one year’s net remuneration.
PIU experts note that the calculation is, of course, average, because accurate requires an individual assessment of the needs of the insured and their families, preferably with the support of a professional advisor.
Consequences of underinsurance
What does a lower insurance sum mean in practice for the insured person? Taking into account Poles’ small savings, earnings, but also the size of financial obligations, in the event of a serious illness or death of the main breadwinner, the situation of many families may deteriorate significantly.
Only insurance in which the sum takes into account credit obligations, the level of savings and earnings can be of real help when something bad happens. In the case of others, if undesirable events occur, there may not be enough funds to meet all needs, which will mean the need to use funds from other sources. Experts also note that with a low financial buffer, it becomes even more important to finance security for yourself and your family in the event of serious illness and death. Meanwhile, Poles’ savings, according to estimates based on the National Bank of Poland, amount to an average of PLN 26.3 thousand. zloty. In addition, the share of people with a loan obligation in relation to all adult Poles is 46.9%. We have 2.43 million housing loan agreements for the amount of PLN 505 billion, 7.66 million cash loan agreements for the amount of PLN 162 billion and 7.92 million installment loan agreements for the amount of PLN 26.5 billion. The average debt of Poles at the end of November 2023 due to a housing loan was PLN 132,000. PLN, cash – PLN 33,000. PLN, and installment – PLN 6,000. zloty. The average housing loan was PLN 207.6 thousand. zloty. There is an average of 1.6 cash loans and 1.8 installment loans per borrower.
The quality of the loan portfolio has seen significant fluctuations over the last two years. According to data from the Credit Information Bureau, the lowest rate of delays in repayment of liabilities (over 90 days) was recorded at the end of 2021 (5.0% of the total value of loans granted, 5.7% of all loans). At the end of November 2023, it was already 6.2%. the total value of all loans granted (5.5% in the number of all loans).
Calculation of the expected average sum insured in the event of death (PLN) / Dziennik Gazeta Prawna – digital edition
It is worth adding that the main cause of death in Poland are circulatory system diseases, which are responsible for 35%. all deaths in the country. Cancer comes in second place with a share of 19%. Meanwhile, according to data provided by the Alivia Foundation, which periodically examines the availability of therapies recommended by the European Society of Clinical Oncology (ESMO) within the public health care system in Poland, the Oncoindex index is 41 on a scale from 0 to 100. An index value of 100 means full availability of all therapies registered in the European Union over the last 15 years, recommended by ESMO. There are also over 100 drug programs in Poland that can help provide access to modern anticancer drugs, but their availability depends on meeting many criteria for qualifying for the program, including undergoing other therapies in treatment programs. This means that in the case of cancer, we have no guarantee of availability of full therapy within the public health care system in Poland. Meanwhile, insurance would cover the costs of private treatment, also abroad, and provide financial assistance during the period when the insured person cannot work.
Knowledge about why Poles approach protecting their family in this way and not differently is provided, to some extent, by data on how many people write a will. Research by the Open Forum Foundation conducted in 2022 shows that only 9 out of 100 Poles over 45 years of age have written a will. When asked why they didn’t do it, 42 percent respondents answered that they had not thought about it, and 23 percent people believe that there is nothing valuable they can leave behind.
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