Azerbaijan working on introduction of annuity insurance – expert

Annuity insurance has the potential for development in the Azerbaijani insurance market, Tofig Aliyev, the department director of PASHA Life Insurance company, told Trend Nov. 21.

An annuity is a contract aimed at generating steady income during retirement, where in lump sum payment is made by an individual to obtain certain amounts immediately or at some point of future.

Insurance companies don’t offer annuity insurance to clients, and therefore, there were no fees this year, just like last year, Aliyev said.

At the same time, this year some insurance companies offered a product that is alternative to annuity insurance, the director noted.

The expert said that this type of insurance refers to life insurance and is equivalent to deposit insurance. That is, people pay a one-time fee and at the end of the period they receive payments from this amount, Aliyev added.

“Presently, PASHA Life Insurance, along with other insurers both within the country and abroad, is carrying out various work in this direction, and I think that in the near future this type of insurance will find its place in Azerbaijan’s insurance market,” the expert noted. “Annuity insurance is really a product similar to endowment insurance, the main difference from which is that it lasts longer, and if a person, having life insurance, waits three years, the period of annuity insurance will be longer, that is, people will be able to use this product closer to retirement age.”