It’s not just the return of the fund in euros to take into account! Faced with an increasingly complex offer, it is necessary to take an interest in different criteria to select the right contract. Explanations.
We all know that life insurance is the preferred investment of the French because it meets several investor objectives: availability, profitability, taxation, transmission. All life insurance policies have the same legal framework and all benefit from the same tax environment, so how do you find the one that suits you best among all the offers on the market? Let’s try to make it very simple in a few words and tips.
For a long time choosing “good” life insurance was limited to comparing the best yields of euro funds. As the latter have lower and lower returns, even below the management fees of the contract, this comparison model has become hackneyed.
Old fashioned or digital?
Digital is certainly on the rise, it allows you to subscribe directly online, to follow your placement – guaranteed time saving – and the costs are often lower than in the real world. The downside will most often be the lack of advice and the inaccessibility to real people when the need arises.
In the real world, we will rather find bank life insurance which sometimes combines the double disadvantage of high costs and funds mainly from the bank concerned. The advantage remains the accessibility of the adviser, to your accounts as well as to your life insurance. There are also wealth management advisers or private bankers who work in open architecture and can offer life insurance with special engineering such as deferred profit sharing or Luxembourg contracts allowing investment in private equity or in several currencies. However, these are reserved for high investment amounts.
Be careful if you have little or no financial knowledge
First, opt for a solution that allows you to make your risk profile upstream, essential to know your appetite or aversion to risk. Or opt for life insurance that allows controlled management that will be able to secure you in the event of market tension. Also avoid launching yourself into a maze of funds on offer. Target contracts where you can make an appointment even online without limit with an advisor – shared agenda of advisors, videoconferences or face-to-face appointments. Sooner or later you will need human contact.
Avoid conflicts of interest between the insurer or the bank by choosing “in-house funds” and, upstream, make a written financial statement which can help you better understand your civil, tax and financial situation. There are free online solutions capable of determining your savings capacity in particular.
Rules valid for all
- Give priority to the seriousness of your interlocutors: a good way is to identify that they comply with the regulations by offering you in particular an entry document with all their authorizations. This document is required by the regulations for financial investment advisers.
- Prefer even digital life insurance from a recognized insurer (look at its financial strength rating).
- Hunt for hidden costs: most life insurance stacks up several costs, some of which are hidden from the saver, such as retrocessions of commissions. Opt for clean share life insurance.
- Take an interest in the minimum payment imposed: the savings you want to invest may not yet reach the minimum threshold of the life insurance chosen.
- Why choose between active management and passive management? You can have both! Indeed, some life insurance companies, especially online, offer passive management with ETFs that replicate benchmark indices, while active management is that of traditional life insurance companies. It aims to deliver a return higher than its index or its asset class. Having both allows in complicated times to play with both universes. You can find life insurance offering both versions and as long as they are clean share, they will meet the best of both worlds.
- Anticipate the duration of your investment: an equity support deserves to be kept for a longer period.
- Pay attention to the deadline in the event of redemption: an essential criterion in the event of a need for cash. Some lead times range from 72 hours to several weeks, the difference can be decisive for you.
- Favor SRI portfolios if you are sensitive to the environment.
- Keep in mind that past performance is not indicative of future performance and there is no high performance without high risk.