Life insurance consists of a contract by which the insurer undertakes to pay either an annuity or a capital to the subscriber for a premium. This type of contract is often distinguished into two parts which are: the insurance contract in the event of death and that in the event of life. This contract brings many advantages, in particular for the insured as for his beneficiaries.
What is a life insurance return?
Life insurance is, until today, considered the most popular investment since it offers various supports to meet the expectations of savers. This type of contract comes in a variety of characteristics depending on the insurer that offers it. However, the functioning of a life insurance policy remains the same. There are the funds invested, the allocations as well as the management strategies which mainly bring the difference in returns. These are also the criteria for widening the performance gaps among the different offers available on the market.
The remuneration given by the insurer to the insured constitutes the yield of a life insurance contract. It is from this yield that you can define the best life insurance among the various proposals spread out before you. However, it is often expressed as a percentage and varies depending on the funds in which the investment has been made. The performance of outstandings is essential to determine the rates of return on contracts.
As a long-term investment, the performance of a life insurance contract is assessed over several years. In order to claim higher returns it would be better to invest in various fields. These can be units of account, government bonds, stock supports, or even real estate support in your contract.
What returns on life insurance?
In general, the higher the return assumptions, the greater the risk of loss. In order to choose the best and most profitable life insurance, do not hesitate to seek advice from your insurer. To better understand life insurance, you need to do a comparison of returns. Those of euro funds are the supports allowing you to undoubtedly grow your savings with confidence. In fact, as the guarantor of your capital, your insurer ensures that you do not lose money. Euro funds thus guarantee you regular but lower returns. And if we compare the rate of return over the last 10 years, we see that the trend is clearly exposed to the downward trend. Indeed, the rate of return in 2019 is around 1.4% compared to 3.4% in the year 2010. These figures are given by way of example but they reflect the reality with all insurers.
Lately, insurers have decided to create a new generation of euro funds which are real estate euro funds, dynamic euro funds… they are more performance oriented and offer the same guarantee on the amount invested. In order to seek a return, these funds are made up of bonds and are invested in financial and real estate supports. Euro real estate funds have served an average yield of around 2.4% net of management fees over the past two years.
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