Life Insurance in Questions
What is a euro fund?
The euro fund is an investment vehicle for a life insurance contract. It can be offered as a single support on single-support life insurance contracts or in addition to account units (Sicav, FCP, etc.) on multi-support contracts.
The euro fund remains the solution of choice for investing capital and valuing it without risk. It allows you to guarantee a regular annual return without any capital risk.
What is a unit of account?
The unit of account is a reference unit of guarantees in the contract corresponding to shares of shares or shares of companies or investment funds (Sicav shares, FCP, SCPI shares, OPCI shares or shares. .) on which the payments net of fees are invested. It’s a great way to diversify your contract and look for a potentially higher return over the euro fund over the long term. The investment may therefore relate to UCIs (in other words collective investment undertakings), most often themselves invested in the financial markets or in asset classes deemed to be riskier than the euro fund (such as real estate for example). The units of account therefore make it possible to invest in particular on the equity markets by taking a risk and by more effectively diversifying one's savings. The value of unit-linked financial supports may vary upwards or downwards depending on developments in the financial markets, the risk of financial losses being borne by the member.
What is arbitration?
Arbitration is the operation that allows you to modify the distribution of your capital between the various financial supports of your life insurance contract. For example, you can switch from a euro fund to units of account, or vice versa. Arbitration can therefore pursue different objectives: secure or, on the contrary, diversify your investments.
- It can be ad hoc: you do it when you think market conditions are right;
- or automatic: arbitrations are scheduled in advance, according to criteria defined contractually.
What is a buyout?
Life insurance is a contract whose capital is available at all times(1), in whole or in part, by making one or more redemptions. The redemption can be total: it then terminates the contract, which is closed. It can also be partial. Scheduled partial redemptions are for example a good solution for those who wish to receive regular income. You can choose the frequency and the amount. The taxation of these redemptions differs according to the age of the contract at the date of redemption.
What is an advance?
The advance is an operation by which the insurer agrees to grant you a loan up to 80% of the surrender value of the life insurance contract invested in the fund in euros. Thus, the capital constituted on the contract serves as a guarantee to the insurer and in return for this advance, you agree to pay the insurer interest, at a fixed rate, on the amount that has been advanced. This is reimbursable according to the contractually agreed terms. The advance does not affect the surrender value of the contract.
How to designate one or more beneficiaries?
The beneficiary is the person or persons chosen by the member to receive the benefits in the event of death. It is up to you to designate them when writing the “beneficiary clause”. You can choose several beneficiaries, without restriction: a member of your family (spouse, child, grandchild, etc.) but also a friend or loved one. You can also designate, under certain conditions, a legal person, such as an association or a foundation.
This designation can be:
- indirect: the beneficiary is not designated by name but by quality (my spouse, my children, my heirs, etc.). This quality will be appreciated at the time of your death;
- or direct: the beneficiary is named by name.
It is very important that the beneficiary clause of a life insurance contract is clear and precise in its wording. In order to avoid any ambiguity in the interpretation of the clause, it is also advisable to detail the full identity of the beneficiary (ies), surname, first names, address, date and place of birth. The choice of beneficiary is possible at any time subject to the agreement of the new accepting beneficiary or the secured creditor if applicable. Also, at each important event in life (birth, marriage, divorce, death …), it is necessary to rethink with the insured the drafting of his beneficiary clause so that it best meets his wishes and needs.
What is a pension guarantee?
The purpose of the pension cover is to protect, during the life of the contract, the insured or his beneficiaries against the vagaries. For example, upon the death of the insured, the insurance company pays the beneficiary the amount corresponding to the cash surrender value. However, this fluctuates according to the evolution of the financial markets. This cash surrender value may therefore, in certain cases, be lower than the net payments made by the insured. It is this risk of capital loss that is covered, in various ways (minimum death benefit, increased, indexed, etc.), the pension options of life insurance contracts. Other guarantees also protect the insured in the event of a hard blow, for example loss of autonomy.
(1) Subject to the contractual conditions in force. In the presence of an accepting beneficiary, or a secured creditor, his agreement is compulsory.