François Lusson, actuary and insurance specialist, gave some advice in an interview with the newspaper Les Échos. He explains who should take long-term care insurance, and in which cases one can opt for a life insurance contract rather than a long-term care guarantee.
Long-term care insurance contract: a question of income?
First, it advises long-term care insurance for people with “average” incomes, without indicating a range of remuneration that could fall into this classification.
People with modest incomes do not have the means according to him to subscribe a dependency insurance, whose contribution can quickly reach more than fifty euros per month for an intermediate dependency guarantee. The APA (Personal Allowance for Autonomy) is also declining according to income, the full rate is therefore possible for people who have an “average” income.
On the contrary, people with significant income will be able to self-insure, most often with long-term investment products such as savings or life insurance.
The specialist adds that receiving a pension of 1,500 euros per month implies the availability of capital of around 80,000 euros.
Take out life or long-term care insurance depending on the case
There remains the question of the choice of contract: should you take out a life insurance contract or rather a dependency guarantee? The expert explains that it greatly depends on the financial capacity of the saver. He gives the example of capital formation: to obtain equivalent available capital, it will be necessary to make more than 4 times more payments on a life insurance contract than a contribution on a long-term insurance contract.
When choosing the mechanism to ensure his loss of autonomy, the insured will also have to ask the question of his capital:
- a dependence insurance is a so-called “lost funds” insurance: you only recover your capital in the event of loss of autonomy (total or partial) that you had insured. If the dependency does not occur, or if it does not correspond to the dependence defined in the contract, you may very well receive no annuity.
- on the contrary, the life insurance policy constitutes personal savings, and your capital increases as you make your payments. The major difference in life insurance placement with the long-term care contract is mainly a question of succession: a long-term care addiction could seriously reduce the capital remaining after your death.