Saving through insurance means that you can select different investment products under one insurance contract, such as funds and investment baskets. Thanks to the insurance contract, you can change the investment products included in the insurance policy without any tax consequences.
You will only pay capital income tax for the income when you withdraw your savings. The term insurance wrapper is often used when talking about saving through insurance. Saving through insurance thus differs from the more traditional forms of insurance, in which an insurance company covers accidents, for example.
Who should save through insurance?
Saving through insurance is suitable for both experienced investors and those just starting to save. If one of the statements below sounds like you, saving through insurance might be a good option.
- You plan to save for at least three years: saving through insurance is intended for long-term saving, but you can withdraw your savings at any time
- You want to save flexibly: you can change investment products using digital services as many times as you want, with no additional costs. You only pay taxes when you withdraw savings.
- Inheritance planning is a current concern for you: OP Unit-linked insurance (OP Sijoitusvakuutus) is an endowment policy with which you can transfer funds to your chosen beneficiaries without a will.
Two ways to save through insurance
When you want to start saving through insurance, you have two options: OP Unit-linked insurance (OP Sijoitusvakuutus) or OP Capital Redemption Contract (OP Kapitalisaatiosopimus). You can start saving with a small sum if you want, and save monthly or by depositing a sum of your choice on an occasional basis. If you are an OP cooperative bank owner-customer, your savings will also earn you OP bonuses.*
The biggest difference between the products is this: in OP Unit-linked insurance, you choose a beneficiary who will receive the funds you saved in the insurance policy once the saving period is over or in the event of your death, whilst OP Capital Redemption Contract is a capital redemption contract that does not cover death. When the policyholder dies, OP Capital Redemption Contract is transferred to the death estate as it is.
*The following investment products linked to the insurance assets do not bring OP bonuses from 1 April 2022: JPM Russia A, JPM Emerging Europe Equity Fund and BlackRock GF Emerging Europe Fund A.
