Insurance — life, savings, health, property

🧔 Adult Insurance is risk pooling: one person's random, heavy loss becomes a predictable, small price for many. That is why, on average, insured people pay more than they get back — the difference covers the insurer's costs and profit. Insurance is not a "good deal" on average. It is a good deal when it protects you from a loss you could not bear.

Myth → truth

• Myth: "Insurance pays off if I get my money back."
• Truth: the best insurance is the one you never need to use — but it is there if disaster strikes.

Who profits? The insurer — from the premiums and from investing them. The intermediary — from the commission. You — when disaster comes and does not ruin you.

Scene for 3D: an umbrella over a town. Everyone holds a little of the handle. When heavy rain falls on one house, the umbrella covers exactly that house.

🧔 Adult The bigger your reserve, the bigger the excess you can take on, and the lower the premium. Insurance and the reserve work together:

• the reserve takes the small knocks;
• insurance takes the big ones.

Questions before any insurance:

1. What exactly do I lose if it happens?
2. Can I bear it myself?
3. How much does the insurance cost compared with what it covers?
4. What is not covered?

Myth → truth

• Myth: "Insure everything so you can be at peace."
• Truth: insure the big things, keep a reserve for the small ones. Otherwise you pay a lot for a peace of mind that the reserve gives you more cheaply.

Who profits? The sellers of "add-on" insurance with every purchase. The EU supervisor lists these products among those that are risky for consumers (Chapter 8).

Scene for 3D: a scale "how much I lose / how much I pay". The child puts a phone, a car, a house and health on it and sees when insurance is worth it.

🧔 Adult In the EU, motor third-party liability insurance is compulsory everywhere. The Motor Insurance Directive 2009/103/EC requires each Member State to take all appropriate measures so that civil liability for the use of vehicles normally based in its territory is covered by insurance (Art. 3) ✔. It sets minimum amounts of cover (Art. 9) ✔ and requires each Member State to set up or authorise a body that pays compensation when the vehicle is unidentified or uninsured (Art. 10) ✔. The directive was amended by Directive (EU) 2021/2118 (which replaced Art. 9 with higher minimum amounts; applies from 23.12.2023, Art. 2) ✔ — the minimum amounts and details are taken only from the text in force. Other compulsory insurance (for some professions, for passengers) is set nationally.

Example: Bulgaria — Compulsory insurance is governed by the Insurance Code, and supervision is carried out by the Financial Supervision Commission (FSC, КФН). Compulsory insurance includes motor third-party liability ("Civil Liability") and "Accident" insurance for passengers on public transport ✔. If the person at fault is uninsured or unknown, the Guarantee Fund pays. The current list and rules (including the "bonus-malus" system for motor liability) — only from the text of the Code in force and the FSC website. Health insurance with the National Health Insurance Fund (NHIF, НЗОК) is social health insurance, not insurance under the Insurance Code: a compulsory contribution to a public system. Voluntary health insurance is a supplement to it (Chapter 6) ✔. Sources: FSC, https://www.fsc.bg ✔; the Insurance Code as published by the FSC: https://www.fsc.bg/wp-content/uploads/2021/files/24426_file.pdf ✔ (⚠ the FSC edition is not the latest version; no current consolidated text was found on an official site in the check of 21.10.2026 — for the latest amendments: State Gazette, https://dv.parliament.bg).

Check in your country — Which insurance is compulsory where you live (motor, home, professional, travel for some visas)? Look on the website of your national insurance supervisor and of the national motor insurers' bureau or guarantee fund. Ask: what does the compulsory policy cover, and what does it not?

Myth → truth

• Myth: "Motor liability insurance protects my car."
• Truth: it pays for the damage you cause to others. Your own car needs separate, voluntary cover ("comprehensive" or "own damage" insurance).

Who profits? Everyone on the road — because the injured person gets compensation even if the person at fault has no money.

Scene for 3D: a crossroads. The child sees who pays in each of three crashes — with liability insurance, with own-damage cover, with no insurance (the guarantee fund).

→ Continue at the source

• EUR-Lex — Directive 2009/103/EC (motor insurance): https://eur-lex.europa.eu/eli/dir/2009/103/oj ✔ · amending Directive (EU) 2021/2118: https://eur-lex.europa.eu/eli/dir/2021/2118/oj ✔
• FSC (Bulgaria) — insurance supervision, registers, consumer information: https://www.fsc.bg ✔
• The Insurance Code (Bulgaria) — text published by the FSC: https://www.fsc.bg/wp-content/uploads/2021/files/24426_file.pdf ✔ (⚠ see the note in the box above)

Sources

• ✔ Directive 2009/103/EC, Art. 3 (compulsory insurance of vehicles), Art. 9 (minimum amounts), Art. 10 (body responsible for compensation) — official text (CELEX 32009L0103), 21.10.2026.
• ✔ Directive (EU) 2021/2118 — amendment of Directive 2009/103/EC; Art. 9 replaced (personal injury: €6,450,000 per accident or €1,300,000 per injured party; property: €1,300,000 per accident); applies from 23.12.2023 (Art. 2) — official text (CELEX 32021L2118), 21.10.2026.
• ✔ FSC — motor liability and passengers' "Accident" insurance as compulsory: https://www.fsc.bg/wp-content/uploads/2021/files/6592_file.pdf
• ✔ Ordinance No 54 (2016) — the registers of the Guarantee Fund: https://www.fsc.bg/wp-content/uploads/2021/files/19595_file.pdf
• ✔ Health Insurance Act (Bulgaria, NHIF) — compulsory health insurance; "Sickness" is a class of insurance under the Insurance Code.

🧔 Adult When term insurance makes sense: when someone depends on your income — children, a partner, a shared loan. The sum is reasonable when it covers the years during which they depend on you. Savings insurance is two products in one. Find out separately how much the insurance costs and how much the saving costs, and compare with saving without an insurance wrapper (Assets and cash equivalents; Interest, compounding and capitalisation). Sometimes the combination makes sense (discipline, tax rules). Sometimes it costs more than the two separately.

Myth → truth

• Myth: "Term insurance is money thrown away if nothing happens."
• Truth: just like with fire insurance — you have paid for the peace of mind that your family will not be left with nothing.

Who profits? Savings products usually pay the seller bigger commissions than protection products. That is why they are offered more often.

Scene for 3D: a bridge over a gorge. Term insurance is the railing while the children cross. Savings insurance is a railing plus a piggy bank built into the bridge — a more expensive bridge.

Sources

• ✔ Example: Bulgaria — the Insurance Code, Annex No 1, Section I — the classes of life insurance: https://www.fsc.bg/wp-content/uploads/2021/files/24426_file.pdf

🧔 Adult The European Insurance and Occupational Pensions Authority (EIOPA) has for years named these products as risky for consumers:

• complex;
• with high costs that significantly reduce returns;
• often sold to people who do not understand them;
• with conflicts of interest in the sale.

Under EU rules, for these products you must receive a key information document (KID) — costs, risks, example scenarios. Read the fees before you sign. Compare: how much would the same investment cost without the insurance wrapper, and how much does a separate term insurance policy cost?

Myth → truth

• Myth: "It is insurance, so it is safe."
• Truth: it is an investment with risk, and the insurance part is often small. Only what is guaranteed in the contract is certain.

Who profits? Often the seller and the funds more than the customer — which is exactly why EIOPA monitors these products.

Scene for 3D: a cake with a see-through cut. The child sees how much is "insurance", how much is "investment" and how much is "fees".

→ Continue at the source

• EIOPA — documents for consumers: https://www.eiopa.europa.eu ✔

Sources

• ✔ EIOPA, 2019 — risk areas (unit-linked, credit and "add-on" insurance): https://eaccny.com/news/chapternews/eiopa-identifies-areas-where-risks-for-consumers-remain-high-notably-with-unit-linked-credit-life-credit-protection-and-add-on-insurance-products/
• ✔ EIOPA, 2021 — value for money in unit-linked products: https://eiopa.europa.eu/system/files/2021-04/consultation-paper-framework-to-address-value-for-money.pdf
• ✔ Regulation (EU) No 1286/2014 (PRIIPs) — KID for insurance products with an investment element (from a summary; the text is on EUR-Lex).
• ✔ EIOPA, "Consumer trends in insurance and pensions 2025: Heatmap with key findings" (17.12.2025) — areas of risk for consumers: claims handling, digital distribution, unusual distribution models, value for money, the pension gap, the protection gap (health, natural catastrophes): https://www.eiopa.europa.eu/publications/consumer-trends-insurance-and-pensions-2025-heatmap-key-findings_en (opened 21.10.2026).

🧔 Adult The heaviest financial blow is often not the illness itself but the loss of income because of it — especially for the self-employed (flow 2) and business owners (flow 3, The five cash flows). So the questions are:

1. What happens to my income if I cannot work for 3, 6 or 12 months?
2. What does the public fund cover?
3. What does my reserve cover?
4. Do I need insurance for the rest?

Read the exclusions — especially for pre-existing conditions and waiting periods.

Myth → truth

• Myth: "I am young, I don't need it."
• Truth: an accident does not ask your age. And premiums are lowest while you are young and healthy.

Who profits? You — if the insurance covers your real vulnerability, not extra services you do not use.

Scene for 3D: three safety nets under a tightrope — the public one, the reserve, the insurance. The child looks for the hole.

Sources

• ✔ Example: Bulgaria — Health Insurance Act; Insurance Code (voluntary health insurance — "Sickness" class).

🧔 Adult Three traps:

• underinsurance — if the sum insured is lower than the real value, you may not receive the full loss. How this is calculated (up to the sum insured, or a proportional reduction) depends on the national law and the contract — so look for this clause (*);
• exclusions — earthquake, flood and others are sometimes separate cover;
• credit protection insurance with a mortgage or consumer loan — sometimes good, but EIOPA lists it among risky products because of its price and how it is sold.

Compare it with term insurance outside the bank.

Example: Bulgaria — Under the Insurance Code (Art. 389), if the sum insured is lower than the real value, you receive the full loss but only up to the sum insured; a proportional reduction applies only if the contract expressly provides for it ✔. With a mortgage, the bank must accept a policy from another insurer if the cover is equivalent (Act on Consumer Credit Related to Immovable Property, Art. 12(3) — as explained by the Association of Bulgarian Insurers: https://www.abz.bg/article/moga-li-da-izbera-sam-zastrahovkata-na-imota-pri-kredit-2454) ✔.

Check in your country — Read your policy for the "underinsurance" or "average" clause. With a mortgage, ask the bank in writing whether you may bring your own policy with equivalent cover; your national consumer protection authority or insurance supervisor can explain the rule.

Myth → truth

• Myth: "The bank sold me the insurance, so it must be the best."
• Truth: in many countries the bank must accept an equivalent policy from another insurer (see the Bulgaria example above). Compare.

Who profits? The bank — from the commission on credit protection insurance.

Scene for 3D: a house on the shore. The child chooses what to insure it against. Different storms arrive — some covered, others not.

🧔 Adult The Insurance Distribution Directive (IDD, Directive (EU) 2016/97) applies to everyone who sells insurance in the EU. Before the contract, the seller must identify your demands and needs (Art. 20(1)) ✔, and for non-life products must give you a standardised IPID on paper or another durable medium (Art. 20(5)) ✔, containing the type of insurance, the main risks and sum insured, the main exclusions, how and for how long premiums are paid, and your obligations (Art. 20(8)) ✔. The intermediary must tell you the nature of its remuneration — a fee, a commission included in the premium, another benefit, or a combination (Art. 19(1)(d)–(e)) ✔. For individual life insurance, the Solvency II Directive gives you a cancellation period of 14 to 30 days from when you are told the contract is concluded; countries may exclude contracts of six months or less (Directive 2009/138/EC, Art. 186) ✔.

Checklist when signing:

1. What is covered and up to what sum.
2. What is not covered (exclusions).
3. Excess.
4. Deadlines — for notifying a claim, waiting periods, cancelling the contract (life insurance — see above and the Bulgaria example).
5. How compensation is paid — in money, by repair, at a garage.
6. Who the insurer is and whether it is licensed (the register of your national supervisor).
7. How much the intermediary takes — you have the right to know the nature of its remuneration.
8. Renewal — is it automatic, and how does the price change?

Example: Bulgaria — The cancellation period for individual "Life" insurance of more than 6 months is 30 days from conclusion (Insurance Code, Art. 447) ✔. The intermediary's duty to disclose the nature of its remuneration is in the Insurance Code, Art. 325(1), point 4 ✔. The registers of insurers and intermediaries are kept by the FSC ("Registers and references"): https://www.fsc.bg/registri-i-spravki/ ✔ (opened 21.10.2026).

Check in your country — Find the public register of insurers and intermediaries kept by your national insurance supervisor; EIOPA links to national supervisors and keeps a register of insurance intermediaries: https://www.eiopa.europa.eu (*). Check the cancellation period for life insurance in your national law.

Myth → truth

• Myth: "All insurance is the same; the price is what matters."
• Truth: the cheapest is often the cheapest because it covers the least. Compare the cover first, then the price.

Who profits? The person who read the exclusions before needing them.

Scene for 3D: a contract under a magnifying glass. The small print "comes alive" and shows which storms stay outside the umbrella.

→ Continue at the source

• EIOPA — the Insurance Distribution Directive (IDD): https://www.eiopa.europa.eu/browse/regulation-and-policy/insurance-distribution-directive-idd_en ✔
• FSC (Bulgaria) — registers of insurers and intermediaries ("Registers and references"): https://www.fsc.bg/registri-i-spravki/ ✔ (opened 21.10.2026).

Sources

• ✔ IDD (Directive (EU) 2016/97) and IPID — EIOPA: https://register.eiopa.europa.eu/Publications/Reports/IDD%20Final%20Report%20on%20draft%20ITS%20on%20IPID.pdf
• ✔ IDD, Art. 19(1)(d)–(e) and Art. 20(1), (5), (8) — official text (CELEX 32016L0097), 21.10.2026; EUR-Lex: https://eur-lex.europa.eu/eli/dir/2016/97/oj ✔
• ✔ Directive 2009/138/EC (Solvency II), Art. 186 — cancellation period for individual life insurance — official text (CELEX 32009L0138), 21.10.2026: https://eur-lex.europa.eu/eli/dir/2009/138/oj
• ✔ Example: Bulgaria — cancellation period for life insurance, Insurance Code, Art. 447 (30 days, contract of more than 6 months); the nature of the intermediary's remuneration, Insurance Code, Art. 325(1), point 4 and IDD (Directive (EU) 2016/97), Art. 19: https://www.fsc.bg/wp-content/uploads/2021/files/24426_file.pdf