Good news for hundreds of thousands of Israelis: Insurance companies are returning 1 billion shekels

After more than 15 years of legal proceedings, 7 insurance companies have begun transferring refunds to hundreds of thousands of policyholders as part of a settlement agreement totaling approximately 1 billion shekels. This concerns policyholders who purchased life insurance policies with a savings component (manager's insurance) between 1982 and 2003, from which a component known as the "policy factor" was deducted.

The companies included in the agreement are Migdal, Clal, Menora, Harel, The Phoenix, Ayalon, and Hachshara. According to the court's decision, they must complete the payments by August 9. Some companies have already begun transferring the funds, while others are in the final stages of preparation.

Eligibility applies to holders of specific policies, including "Profile" and "Meitav" (Clal), "Adi" and "Meule" (Harel), "Yoter" (Migdal), "Merav" (Menora), "Maniv" (The Phoenix), and "Adif" (Ayalon and Hachshara). Heirs of deceased policyholders may also be eligible to receive the funds.

The refunds will be transferred automatically. Policyholders who still hold the policy will receive the money directly into it, while those who have redeemed the policy will receive the refund via bank transfer, through the Bit app, or by check, depending on the data held by the insurance company. The companies are expected to send personal notifications to all eligible individuals.

The refund amount was determined according to a formula approved as part of the settlement agreement and includes the restoration of 42% of the damage caused to savings due to the collection of the "policy factor," plus compensation for lost yield.

The refund amount varies from one policyholder to another and is generally estimated at hundreds to thousands of shekels, though in exceptional cases it may reach tens of thousands of shekels.

The settlement agreement was approved back in 2024, but its implementation was delayed due to a dispute over the method of calculating the refunds. In May of this year, the District Court ruled that the payments should no longer be delayed, even if an appeal is filed, and ordered the companies to complete the refunds within 75 days. In addition, pension consultant Avi Eichler was appointed to oversee the implementation of the agreement and the manner in which funds are calculated and transferred.