Life insurance is a complete product that can offer a multitude of supports and options in order to best adapt to your needs and your investor profile.
Individuals wishing to invest their capital in the medium or long term can subscribe to a life insurance contract which, depending on the contract, offers a wide choice of investment vehicles between the euro fund with secure capital (minus any fees of the life insurance contract and the cost of any additional guarantees), and account units presenting a risk of capital loss. Here are the main criteria to study before joining a contract.
TYPE OF SUPPORT
Multi-support life insurance policies can offer a wide range of investment vehicles, more or less risky and with a higher or lower potential return:
- Support in euros: which guarantees a secure return.
- “Euro-growth” support: which allows you to benefit from more dynamic financial management than support in euros while providing a total or partial capital guarantee at the maturity you have defined.
- Support units of account: which offer attractive remuneration potential but present a risk of capital loss.
The diversification of investments, especially in riskier assets than the euro fund, allows you to expect a higher return.
The risk / return ratio is assessed according to the distribution between security and more dynamic supports and must respond to the risk appetite, profile and investment horizon of the investor.
SUPPORT PERFORMANCE POTENTIALS
In the context of low interest rates observed for several years, the returns of euro funds, mainly invested in government bonds, are limited. Therefore, investing in unit-linked supports with a view to diversifying your savings is a solution to study closely. Account units offer a generally higher long-term return expectation than euro funds in return for greater risk taking because capital is not guaranteed. Your investor profile and risk aversion will guide you in choosing the units of account. There are a wide variety of them invested in bonds, stocks or real estate with a higher or lower degree of volatility and different investment strategies.
THE DIFFERENT MANAGEMENT MODES
To manage the investments on the supports of the life insurance contract, there can be different management modes: free management, advised, managed or under mandate. The management method chosen depends on your financial knowledge and the time you have to make the arbitrations.
To find out which option is best suited to your profile, you can consult your advisor who will assess your knowledge and determine with you the solution that best suits your expectations. However, not all life insurance contracts offer all the management methods, you must contact your advisor to find out more about the conditions, thresholds and prices for the different management methods.
Membership and management of your life insurance contract is subject to fees which are of several orders and deducted directly from your contract.
When you make payments on your contract, payment fees are applied, they are capped at 5% of the payment amount. Some contracts directly subscribed online do not charge this type of fee.
When you arbitrate on your contract, so-called arbitration costs may be charged. The costs generally amount to 1% of the amount arbitrated, sometimes, depending on the contracts, at a fixed price. Some contracts offer a few arbitrations per year and other online subscribers do not charge arbitration fees. Concerning automatic arbitrations which are linked to options for managing your contract with a view in particular to securing capital gains, they are also invoiced.
Finally, life insurance contracts may be subject to management fees.
The types of fees, the amount of the various fees and their application vary from one insurer to another depending on the conditions provided for in the contract. Before subscribing to a life insurance policy, it is wise to compare the different offers on the market because the cost of your contract reduces the return on your investment.
© Webedia – June 2020
Informative and advertising article.
Certain products and services mentioned in this article may be marketed by Crédit Agricole: ask about their availability in your Regional Caisse. Subscription to these products and services may be subject to conditions or to the regulations in force, as well as to the study and acceptance of your file by your Regional Fund.