What life insurance is

Life insurance is a contract under which the insurer pays out if the insured person dies or survives to a certain age or date. Its main purpose is to protect loved ones financially if the breadwinner dies and, if needed, to build up capital by a set date.

Types of plans

  • Term (risk) life insurance — protection against death only, often together with disability and critical illness. Premiums are low, there is no savings element.
  • Endowment life insurance (NSZh) — protection plus savings: regular premiums, a guaranteed return and a payout at the end of the term. Suitable for saving for children's education or retirement.
  • Investment life insurance (ISZh) — the return depends on financial markets and is not guaranteed. It is more of an investment product; do not put money into it without understanding the risks.
  • Unit-linked life insurance — part of the money is linked to investment results, and the risks and return depend on the chosen strategy.
  • Credit life insurance — taken out with a loan, the payout goes to repay the debt; see mortgage insurance.

Laws and guarantees

Life insurance for individuals is voluntary. The contract is concluded under Chapter 48 of the Russian Civil Code; the insurer must hold a Bank of Russia life insurance licence. Several protection mechanisms are worth knowing:

  • Cooling-off period. Under Bank of Russia Directive No. 3854-U a voluntary policy can be cancelled within 14 calendar days if there have been no insured events.
  • Tax deduction. From 1 September 2026, voluntary life insurance premiums count towards the long-term savings deduction (Article 219.2 of the Tax Code as amended by Federal Law No. 418-FZ of 17 November 2025). Conditions: the contract is concluded with an insurer on or after 1 January 2025 for at least 10 years until the first payout, for yourself or for family members and close relatives. The limit is RUB 400,000 a year, shared with the PDS, non-state pension provision and type-3 individual investment accounts; up to RUB 500,000 for contributions in favour of children. The social deduction under Article 219 for life insurance (contract of 5 years or more, overall social deduction limit of RUB 150,000) can only be claimed for premiums paid in 2025 and earlier years.
  • ASV guarantees. From 1 January 2027, under Federal Law No. 477-FZ of 26 December 2024, a system guaranteeing rights under life insurance contracts starts operating, run by the Deposit Insurance Agency (ASV). A guarantee event is the withdrawal of an insurer's voluntary life insurance licence (except withdrawal at the company's own request). The payout limit is up to RUB 2.8 million across all contracts with one insurer per person, and up to RUB 10 million where there is a right to a payout because of the insured person's death.

What drives the price

  • age and sex of the insured person;
  • health: the insurer may ask for a questionnaire or medical examination;
  • occupation, hobbies, dangerous sports;
  • sum insured and term of the contract;
  • additional risks: disability, critical illness, premium waiver;
  • for savings plans — premium frequency and the chosen return.

The life insurance calculator gives an indicative cost.

How to choose a plan and insurer

  1. Define the goal: protecting the family while the loan is repaid and the children grow up, or building capital.
  2. Work out the sum: people often base it on several years of family income plus large debts.
  3. Study the surrender value table: if a savings contract is ended early, especially in the first years, you may get back less than you paid in.
  4. Check the exclusions: suicide in the first years of the contract, participation in hostilities, conditions concealed at purchase.
  5. Choose a reliable insurer: compare companies in the directory of insurers.

How to claim

  1. The beneficiary or heir notifies the insurer of the event.
  2. They collect documents: the death certificate, the medical report on the cause of death, documents confirming the right to the payout.
  3. They file the claim; the insurer reviews it within the time set by its policy wording.

A payout to a named beneficiary under a life insurance contract is not part of the estate. More in the Insurance claim section.

Common mistakes

  • Confusing ISZh with a bank deposit. Investment life insurance returns are not guaranteed.
  • Hiding illnesses in the questionnaire. This is grounds to refuse a payout or challenge the contract.
  • Not updating beneficiaries after a divorce or the birth of children.
  • Ending a savings contract early and losing part of the money.
  • Not claiming the tax deduction when a contract concluded from 2025 for 10 years or more allows it.