At the level of commercial banks: no miracle either! Banks are remunerated in the form of a commission taken from the costs of managing life insurance contracts. These same contracts are often offered by insurance subsidiaries and the financial products are therefore often inefficient and riddled with management fees.
2 – The duration of the placement
A life insurance contract is not attractive for an investment duration that is too short, generally less than two years. Before investing funds in a life insurance policy, it is therefore essential to take stock of your wealth objectives before ensuring that you will not withdraw the funds too quickly.
3 – Contracts associated with additional protections
Be wary, like the plague, of certain life insurance contracts which offer both protection in the event of death and a guarantee in the event of life. This combination may turn out to be less advantageous than it seems. These mixed contracts are often associated with major disadvantages, making them less attractive for those seeking to maximize the benefits of their savings while ensuring adequate protection for their loved ones. Faced with this situation, it is wise to consider a more segmented approach by subscribing to two distinct products: one dedicated to savings and the other to death insurance. This strategy allows optimization of the advantages offered by each type of product. On the one hand, a pure savings contract will allow you to build up and grow your assets under often advantageous tax conditions. On the other hand, specific death insurance will offer suitable coverage to financially protect your loved ones in the event of premature death, especially if your existing assets are not sufficient to provide for their needs.
4 – Unit-linked funds to boost the performance of your contract
Contrary to popular belief, life insurance is not limited exclusively to euro funds. Unit-linked investment funds also make it possible, to a certain extent, to significantly boost the overall performance of your financial portfolio, whether upwards or downwards. You should know that a unit-linked life insurance contract is invested in different investment vehicles, which allows you to effectively diversify your financial investments and also benefit from better performance than with a fund. euros. Overall, the more a life insurance contract is invested in the financial markets, the more the overall performance is very unstable.
5 – Payment conditions
When considering taking out an insurance contract, it is crucial to understand the payment conditions imposed on you. It is important to understand that certain contracts require the insured to make regular monthly payments. While this may seem like a disciplined way to save, these products have a major drawback: they often come with financial penalties for missing payments. This condition can prove restrictive, especially in unforeseen situations affecting your financial capacity.
Faced with this constraint, it is strongly recommended to opt for so-called “free payment” contracts. The main advantage of these contracts lies in their flexibility. They allow you to make payments according to your own capacity and at the frequency you wish, without exposing yourself to penalties for modification or interruption of payments. This option offers valuable freedom, particularly from an adaptive budget management perspective.
It is even possible, for those who wish, to organize regular withdrawals directly from their bank account, in order to maintain monthly savings discipline. The advantage here is that you maintain total control: you can decide at any time to modify the amount of direct debits or to suspend them, without incurring fees or penalties.
6 – Don’t fear online brokers!
Most leading online brokers have been in the market for several decades. The funds invested are also placed in an investment company regulated by the AMF, and not with online brokers who are of course only intermediaries. The online broker also allows you to compare the performance of the best life insurance contracts and therefore allocate funds to the contracts best suited to your financial situation and your objectives.
7 – Free management or controlled management?
While managed management gives you the possibility of choosing the profile offered by the broker according to your wealth objectives, free management offers you more possibilities. This management method allows you in particular to choose the allocation allocated to each investment medium (euro funds, units of account), which therefore offers you greater control.
8 – Too many costs = run away!
Some life insurance contracts are sometimes associated with “usurious” fees: up to 5% on payments is far too much! You should ideally choose a life insurance contract with no fees for payments, arbitrations and surrenders. Over a long period of time, this saves you substantial funds.
2024-03-03 18:01:12
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