With rising interest rates, solid returns in 2023, and a very promising start to 2024, the sky is clearing for savers. A flexible tool with preferential taxation, life insurance is once again becoming attractive and the safest of banking investments. However, in a context of inflation, diversification remains the wisest course. Identify your needs, identify the different products available, negotiate your contract, go through a management company, monitor costs, generate long-term performance: L’Express guides you.
Many savers take out life insurance offered by their bank without batting an eyelid. However, it is useful to validate the quality of the proposed package before committing, especially since you are likely to keep it for many years. Here are the four main points to validate.
1. A solid euro fund
How to assess your potential? By observing the net return attributed by the insurer over at least five years and its current dynamics. A benchmark: over the period 2019-2023, the average market rate stands at 8.80% cumulatively. But be careful, it hides huge gaps, with the worst stabilizing around 6% when the best have exceeded 11%. From single to double! This information is not sufficient: it will be necessary to consider whether this return has been allocated under conditions, for example increased only for clients taking risks on their savings at the same time through the units of account. Is this compatible with your profile? Another key point: the insurer’s return reserves. At 3% or more, this bodes well for the years to come because they will be able to boost the rates served. Without certainty however, the companies are free to allocate this prize pool to the contracts of their choice.
2. A suitable financial offer
The idea is simple: a good contract must integrate a range of financial supports allowing a real diversification of your savings, essential to generate more performance over time. Very often, having access to around twenty funds will be sufficient, if you find the majority of asset classes (shares, bonds, real estate) and several management companies. The broader offerings (up to 1,000 funds) from independent wealth management advisors or accessible on the Internet remain to be targeted by more informed or well-advised savers. Most now include turnkey management entrusted to experts (the insurer or a management company). An interesting concept, the content, costs and past results will nevertheless need to be studied.
3. Limited fees
Earning more with an investment also means not paying too much for it. Concretely, do not accept more than 2% taken from payments, knowing that many good contracts display 0%. These fees can be negotiated with the advisor, which will not be the case for management fees. Here are the average rates charged: 0.80% on the fund in euros, 0.90% otherwise. Is paying more justified? No, unless you obtain expert advice and services. Then pay attention to the cost of managed management (0.20% on average, a level not to be exceeded), that of additional guarantees (for example, to erase losses in the event of death), or arbitrations (these are necessary at least one free per year). All costs appear in the contract notice and on the insurers’ websites.
4. A recognized after-sales service
This acronym designates the after-sales service of a product, including financial. In terms of life insurance, this will involve the processing of your payments, withdrawals, arbitrations, and the information provided along the way. How to evaluate it? By asking questions. For example: will I be able to manage my contract directly on the Internet or will I have to go through an advisor? For a withdrawal, within what time frame will the amounts be transferred to my bank account. Allow two days with good insurers, a good month otherwise. The same goes for arbitration: the most responsive guarantee registration the next day, the slowest after a week. After-sales service still manages the processing of old products over time: do they benefit from the technical developments allocated to new products? The answers on these subjects are often incomplete. It will be necessary to insist…
An article from the special “Placements” section of L’Express, published in the weekly on April 11.
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