Life insurance is very popular in France and is particularly suitable for those who want to invest safely or save serenely. This to pass on your inheritance or also to benefit from a supplement of income once you reach retirement age. You will thus have an interesting investment with simple subscription conditions and management. Here is a closer look at the main reasons why you should take out life insurance.
Life insurance: simple and profitable savings.
Life insurance is a contract between an insured and an insurer. It is not just a simple investment perceived by a beneficiary if the subscriber dies, as many people believe. It’s even the opposite of the basics. As the insured and in the event of your life, you will be able to receive the money you have saved at the end of your contract. So this policy offers more than just death insurance. It allows a very advantageous taxation representing one of its main assets. If you invest your savings in a life insurance policy, you will benefit from an interesting tax exemption from the eighth year onwards. However, if you die before the term of the contract, the money invested will be paid directly to the beneficiaries previously named by you. This is the second major advantage of life insurance. A simple bankbook or savings plan will not allow you to designate someone to benefit from your money if you die. It will just be paid into your inheritance and distributed among all your heirs afterwards.
Opt for safe management…
Life insurance is an attractive investment medium that can be managed in two different ways. You can have a single-support contract or a multi-support contract. For the first category, life insurance will take the form of savings made up of “euro funds”. The compartments of this type of contract are risk-free, making it one of the main originalities of life insurance. The capital that you will have invested can never decrease. In fact, your insurer will guarantee you a minimum annual rate of revaluation, known as the technical rate, to which dividends will be added at the end of the financial year. Thanks to the ratchet effect produced by this contract, you will therefore win for sure. Your earnings can no longer be called into question once they are credited to your account. They, in turn, will also benefit from the resets each year. Despite these significant advantages, however, euro funds have shown a steady decline in returns over the last ten years.
…Or invest dynamically
Multi-support contracts form the second category of life insurance. They include both unit-linked and euro funds. They are therefore contracts made up of numerous investment compartments. Unit-linked policies are in fact Undertakings for Collective Investment, which are mutual funds. Both upwards and downwards, they evolve at the same pace as these funds, which offer no capital guarantee. You can therefore invest in several asset classes through equities, real estate or bonds with varying levels of risk. Thanks to a multi-support contract, you can mix these two types of management to juggle security with one part of the savings and the dynamism of the funds with the other. The allocation is therefore not fixed between these sub-funds. As soon as the allocation between financial asset classes no longer seems to be appropriate to the economic environment or your situation, you can initiate arbitrage to change it and move all or part of your investment to new sub-funds.