## Private Retirement Funds Gain Popularity in Ecuador
Private retirement funds or retirement plans are gaining ground in Ecuador. They are products of life insurance.
The agreement consists of setting an amount with the insurer, paying it monthly, and after an agreed time, receiving an income that can even be for life. The younger you are, the lower the amount, because the contribution time is longer. These policies generate interest.
In the last five years, the amount of money entrusted to insurance companies for this type of policy has increased by 36%. 22 of the 27 insurance companies in the country offer this service, according to the Superintendency of Companies, Securities and Insurance.
In 2023, USD 673 million was reported, while in 2019 it was only USD 433 million.
“In the market, there are options from USD 25, USD 50 and USD 100 per month.” It will all depend on age, because since it is an insurance policy, our mortality rate must be measured,” said Joselin Báez, director of Vanguardia Seguros.
For control purposes, life annuity insurance must be registered with the Superintendency of Companies before being marketed.
The rate and forms of policy sustainability are defined. In addition, an economic reserve is established that guarantees the money of the insured, which is frozen for 15 years or more.
Patricio Salas, executive secretary of the Ecuadorian Federation of Insurance Companies, says that this helps policyholders recover their value if the company faces bankruptcy.
Before taking out insurance with these characteristics, it is essential to verify whether the insurance company is registered with the Superintendency of Companies, to avoid any fraud.