Life insurance: three types of real estate media scrutinized

If the majority of your savings are invested in the fund in euros of your life insurance, your return has been very meager for a few years. To hope to earn more, without taking too many risks, bet on real estate. “This asset displays less volatility than the stock market, but, unlike the fund in euros, it does not offer a capital guarantee”, specifies Guillaume Arnaud, chairman of the management board of Sofidy.

1/ SCPIs: purely real estate, but charged with fees

By buying shares in real estate investment companies (SCPI), you benefit from the expertise of a professional manager. The latter acquires several properties (offices, shops, logistics, etc.), takes care of their rental management, then regularly pays you a share of the rent collected. Among all investments, SCPIs show an interesting and relatively stable return over time. Last year, according to the French Association of Real Estate Investment Companies (Aspim), they brought in an average of 4.45% to savers.

Slipping it into your life insurance therefore has a pecuniary interest, and especially a tax one. Because as long as the income remains within the contract, it is neither taxed at your marginal tax bracket nor subject to social security contributions of 17.2%, as is the case when you hold property directly. In the event of withdrawal or transfer of the contract, the taxation applicable to the gains is also that – very favorable – of life insurance. The other advantage is the greater liquidity of this investment, since the insurer undertakes to redeem your shares at any time if you wish.

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Do not neglect, on the other hand, the weight of the constraints of this mode of detention. First, you will not have access to the entire market, since not all SCPIs are eligible for life insurance. The choice of contracts is also limited, because, in general, “only those distributed to wealth clients allow such diversification”, recalls Marc Bertrand, CEO of Amundi Immobilier. Another black spot, “insurers rarely accepting arbitrations to SCPIs, savers almost always have to make new payments to buy shares”, underlines Sonia Fendler, president of Altixia Reim.

In addition, “their proportion in the total outstanding amount of the contract is also capped, generally around 20%”, she adds. Do not lose sight of the fact that the entry fees for life insurance will be added to those, already high, of SCPIs. And that the income from the shares will be collected not by you, but by the insurer. As he is not required to distribute everything to you, he may keep a share in reserves, which will reduce the performance of the investment. Finally, if your acquisition of SCPI takes place via life insurance, you will not be able to finance it on credit or in dismemberment. Recommended for those who are heavily taxed and are looking for a real estate investment strategy.



Dario Ingiusto / L’Express

2/ OPCIs: light diversification, with liquidity

Launched fifteen years ago, Real Estate Collective Investment Schemes (OPCI) are hybrid investments. Their managers must invest at least 60% in real estate (direct buildings or listed securities of real estate companies) and 40% in financial investments (including 5% to 10% in cash). “Unlike SCPIs, OPCIs are almost entirely distributed via life insurance,” says Pierre Schoeffler, senior advisor at the Institute for Real Estate and Land Savings (IEIF).

The advantage of putting it in your contract? As these are capitalization products, you will be sure to recover the full performance. The advantages in terms of taxation and liquidity, related to holding through life insurance are also important.

The other side of the coin, because of their composition, a possible stock market underperformance would erase a large part of the returns from the real estate pocket. Worse still, in the event of a slump in the equity markets, as in 2020, OPCIs would post a negative performance and you would lose part of the capital invested. Although rare, this risk should not be overlooked. According to Aspim, while OPCIs yielded an average of +4.4% in 2021, their return was -1.54% in 2020 and +5.4% in 2019. But behind these figures lie strong disparities. Because, from one management company to another, the investment strategies have nothing to do. Some take risks on their real estate pocket by stabilizing their portfolio with a strong dose of cash, while others ensure investment security with real estate and take risks on the stock market. These investments are therefore more intended for savers looking for a slight diversification towards real estate.

3/ SCIs: calibrated for life insurance, but not very transparent

The most recent product in the “paper stone” galaxy, the Société Civile Immobilière (SCI) is on the rise. “This is a capitalization product accessible only in life insurance. Their managers invest exclusively in real estate, but with much more flexibility,” explains Pierre Schoeffler. They can thus buy entire buildings directly or via other civil companies, shares in SCPIs or OPCIs, listed property securities, funds invested in stone, etc. “SCIs provide exposure to real estate in a broad, diversified and international way”, affirms Antoine Depigny, director of development of Primonial Reim France.

Their yield remains quite interesting, since it was 3.8% on average last year according to Aspim. But with very strong disparities: 9% of the market posted a performance of 5% to 9% in 2021, while 21% of the market oscillated between 1% and 3% of return. This is where the complexity of this product lies: as it offers total latitude to managers, they can take significant risks, which should not be overlooked. Another point: SCIs are expensive because, by investing indirectly, they settle a cascade of costs that eat away at performance. They are reserved for well-advised clients, who seek diversification in stone, while accepting a dose of risk linked to conviction management.

The Express



Dario Ingiusto / L’Express



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