a “millefeuille of fees” to watch out for

The preferred placement of the French is increasingly sought after for the yield potential of these holdings in units of account

. Multiple frequency levels of certain insurance contracts can capture most of these performances. Sur ce marché, certain players are, however, epingle du jeu with competitive rates and à la carte offers …

Temporarily shunned during the coronavirus crisis in 2020, where it had a historic net take-off of 6.5 billion euros, life insurance regained color last year and continues its momentum in 2022: net collection of these contracts reached 5.9 billion euros in January and February, at its highest level since 2016 during the same period

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In a context of rampant inflation and fears of war in Ukraine, the “preferred placement of the French” is still in full swing, and it is increasingly in demand for its units of account (UC, including capital). invested is not guaranteed): in February, the share of premiums invested in units of account represented 43% of life insurance contributions for the month, a historic record!

The diversity of the holdings in units of account (underlying shares, bonds, real estate, unlisted …), coupled with the security of the fund in euros (as for its capital, whose capital is guaranteed), make insurance a long-term investment suitable for all investor profiles … provided, however, that the costs are monitored.

Stacking fees and lack of transparency

Because the stacking of fees on these contracts is common, at a level that can often capture the bulk of the performance of these investments! In addition, these high costs are sometimes accompanied by a lack of transparency which does not allow the holders of these contracts to take full action.

Denounced for many years by consumer associations, both for the excessive frequency and opacity of the information provided to epargnants, the abusive practices of some distributors in terms of life insurance have been recent. brought to light by the state and parliamentarians. However, this transparency needs to improve in the coming days. The insurance and banking industry has made a commitment to improve information on these fees as early as this year: a space agreement was signed in February bringing together distributors and producers of life insurance and retirement savings plans ( PER) commits the profession to make appear on their Internet sites, from next June, a table of standard tariff information of their contracts.

In parallel, an arrêté published in March 2022, is mandatory in the pre-contractual and annual information, on July 1, 2022, the communication of frequencies, all units of account supported by investors in insurance contracts, capitalization and PER.

0.8% of contract management fees on average according to the Sénat report

  • Having clear and non-misleading information about the cost of a life insurance policy is essential to ensure the “real” performance of your investment. According to an information report du Sénat published in October 2021, for an initial investment of 5,000 euros in a life insurance contract, with a monthly payment of 100 euros, a French saver pays an average of 0.8% of contract management, 3% entry fee and 1.5% fund management fee … and remains a loser for one year if his investment does not reach 5% annual return!In order to avoid finding an investment that is more profitable for the insurer than for himself, he will need to make sure that he knows exactly the different types of fees that are likely to be applied to these contracts. , mainly:
  • Entrance fee (or payment fee)levied on the sums paid by the investor on his contract;
  • Annual contract management fees applied by the insurer, expressed as a percentage of outstanding loans;
  • Arbitration feeswhich are levied by the insurer when the investor changes the distribution of his savings between the various supports offered in the contract;
  • Annuity arrears fee in the case of its implementation if desired, punctuated on each annuity paid by the insurer to the beneficiary of the annuity due under the life insurance contract;[FR:FR0013346970:5]Units of account may also incur frequent charges[:FR]

which are levied by the management companies that manage the assets of these media

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Are online contracts necessarily competitive?

There are also costs of changing the mode of management of the contract (Free management versus Managed management), redemption and / or transfer of contracts applied by the insurer, and even “performance commissions” which are applied by management companies and the annual return of the unit of account is higher for forecasts …

Fortunately, not all insurance companies apply this tariff millefeuille, and a few players are pulling their pin out of the game by severely limiting the number and level of these fees.

At this point, the institutions that offer 100% online life insurance contracts remain the most competitive. But even within these digital offerings, the expense note applied can be salty.

According to a comparative study conducted by Sicavonline and Ageas France (Profideo source) in April 2022, considering the average management fee found on 30 life insurance contracts marketed on the Internet, for an investment of 10,000 euros over 10 years ( without revaluation of the contract), this average management fee is 0.74% for a 100% contract in units of account with scheduled payments, or 716 euros per year. For a contract invested 50% in units of account and 50% in euro funds, the invoice would amount to 697 euros for 10 years.

KOMPOZ: an average saving of EUR 275 per year for units of account

By making a wise choice, however, the savers can distribute such fee levels. KOMPOZ, Sicavonline’s new life insurance contract, is one of the cheapest products on the market.

KOMPOZ does not apply any entry frequency does not survive, no arbitration fee for the first 15 per calendar year, and proposes annual management fees well below the market average, from 0.45% – depending on the options chosen – including 0.01% membership fee.

Compared to the average cost of the online contract market, KOMPOZ thus saves 275 euros on its management costs, or 38% savings for a 100% unit of account contract. Similarly, on a membership with a distribution of 50% funds in euros and 50% in UC, the savings in management fees reached 16%.

KOMPOZ: a wide choice of a la carte investments

Accessible from 100 euros, with the replacement of “scheduled payments” in free management (from 500 euros for an initial payment), KOMPOZ is also 100% modular, after which the possibility to pay only on duty. often supports and options chosen from a very wide range of investment supports. It offers funds in euros and more than 700 holdings in units of account: more than 500 UCITS, more than 40 ETF followers, more than 20 real estate holders (SCPI, sociétés civiles, OPCI), more than 130 securities vifs et two capital investments.

A real strength, as it is generally difficult to control the costs associated with unit of account due to the lack of choice left to investors, who may find themselves with units of account heavily charged in their contracts.

Modular and economical, a KOMPOZ life insurance solution has already been offset by several awards in 2021 and 2022, with a Top d’Or de l’Assurance vie in line in the Innovation category, at the Label Excellence des Dossiers de l’Epargne two consecutive years and an Oscar Fortune Management “New Contract” category.

* Risk of investing in a unit of account support

The desire for a better return is accompanied by a risk-taking, the holdings in units of account present a risk of capital loss. The amounts invested in the media in bare units of account are guaranteed, they are subject to upward or downward fluctuations depending in particular on the evolution of the financial markets. It is recalled that past naked performance does not prejudge future performance. In some cases, the insurer may not be able to invest or deactivate certain units of account. In accordance with the regulations, he may be threatened with suspension or temporary suspension of certain contract operations.

KOMPOZ is a group life insurance policy insured by Ageas France and marketed by Sicavonline, as an insurance broker. The subscriber of the KOMPOZ contract is the association Personaliz Epargne Digitale, a member of the association and adherence to the KOMPOZ contract.

Content proposed by SICAVONLINEL The editorial staff of Boursier.com did not participate in the creation of this content.

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