# 15. Life and health risks and insurance-based investments

URL: https://insurancelawestonia.ee/insurance-law-cpd/life-health-and-insurance-based-investments/
Author: Dr Olavi-Jüri Luik, Partner, Head of Insurance Law, attorney at law (Advokaadibüroo WIDEN OÜ)
Last updated: 2026-11-11

> CPD module 15: forms of life insurance, beneficiaries, suitability assessment for unit-linked life insurance and PRIIPs information.

Module 15 of 20 · Theme: Lines of insurance · Level: Specialist · Suggested study time: 90 minutes 

**In short.** This module covers the different forms of life insurance, the designation of beneficiaries and the suitability assessment and information for investment-risk (unit-linked) life insurance.

## Learning outcomes

After completing this module you will be able to:

- distinguish risk cover, savings and investment risk;
- check the designation and change of a beneficiary;
- distinguish suitability and appropriateness assessments.

## Key points

### The function of cover

In life insurance the insurer pays the beneficiary an agreed sum on the insured person reaching a certain age, marrying, entering into a cohabitation agreement, dying or on the birth of a child (VÕS § 532). Distinguish death and survival risk, savings, investment risk and riders; health cover may also be non-life or accident insurance. The product name is not a classification.

### The beneficiary

The policyholder may designate a beneficiary and change the designation without the insurer's consent, even if the beneficiary was named in the contract (VÕS § 537(1)); the beneficiary acquires the right to claim only when the insured event occurs (§ 537(2)). After the policyholder's death the heirs may not replace the beneficiary (§ 425(2)). Designation of a beneficiary and succession are different mechanisms.

### Suitability and appropriateness

For investment-risk life insurance the insurer must assess the suitability of the contract and its underlying assets for the policyholder by collecting information on its knowledge and experience, financial situation and investment objectives (KindlTS § 222(2)). Not assessing appropriateness is permitted only under the conditions in § 222¹, including where the customer approached the insurer and was warned. In addition, the PRIIPs key information document must be provided (VÕS § 428(2)(4)).

### What must not be promised

If the contract contains no guarantee, preservation of capital must not be promised. For investment-risk life insurance the possible returns may not be emphasised without at the same time clearly indicating the risks of the contract (VÕS § 428(2)(4)).

## Read before the quiz

Articles on this site:

- [Lines of insurance in Estonia: property, BI, liability and more](https://insurancelawestonia.ee/guides/lines-of-insurance-estonia)
- [EU regulations for insurers in Estonia: Rome I, DORA, PRIIPs](https://insurancelawestonia.ee/legal-framework/eu-regulations)
- [Insurance distribution in Estonia: IDD rules for brokers, agents](https://insurancelawestonia.ee/guides/insurance-distribution-idd-estonia)

Legal sources:

- [VÕS §§ 425, 428, 532–548](https://www.riigiteataja.ee/akt/V%C3%95S)
- [KindlTS §§ 221¹, 222, 222¹](https://www.riigiteataja.ee/akt/KindlTS)
- [PRIIPs Regulation (EU) No 1286/2014](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014R1286)

## Practical case

*Write down your own answer before opening the suggested approach.*

A customer approaching retirement wants the savings to be preserved. The investment-risk life insurance on offer is linked to equity funds whose value may fall. What must the distributor collect and what must it not promise the customer?

Suggested approach

Collect: knowledge and experience in investments, financial situation and ability to bear losses, investment objectives and time horizon, risk tolerance (KindlTS § 222(2)). The conflict between the objective of preserving capital and equity risk must be explained; if the product does not meet the objective, it must not be recommended as suitable. Without a contractual guarantee, preservation of capital must not be promised and returns must not be emphasised without referring to the risks (VÕS § 428(2)(4)). The PRIIPs key information document must be provided.

## Self-check quiz

Answer the three questions and press "Check answers". An explanation is shown for each question.

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