Life insurance: what performance for your savings?
French savers have a relatively high risk aversion. Even today, most of the outstanding investments invested in life insurance by investors are invested in euro funds. The success of the euro funds is due, in part, to the guarantee of invested capital. Outstanding investments in euro funds amount to almost 1.3 trillion euros. By comparison, the amount of outstandings placed on Booklet A and the LDDS is slightly less than € 500 billion.
In recent years, the performance of euro funds has been steadily declining, a fall in yields that worries all risk-free investments. The recent rise in the 10-year OAT rate (the treasury bills issued by France), however, suggests a stabilization in the performance of the euro fund.
Most of the performance of the euro funds delivers between 0.80 and 1.60%. Few funds exceed this rate.
But savers have the choice to invest outside the euro fund. Because in life insurance, you can also invest in units of account (investment funds). In the inflationary context, that we traversons, investors have every interest in turning to dynamic media in units of account. Life insurance allows you to diversify your savings on equity funds and real estate media.
Therefore, the performance of the life insurance will depend on the choice of allocation of the insured, ie the distribution chosen between euro funds and units of account. Equity fund performance varies greatly from year to year. On the real estate side, SCPIs (civil real estate investment companies) are currently highly acclaimed by savers, with average annual performance of around 4.5%, excluding revaluation of units.
Comment identifier the best life insurance?
The best insurances are distinguished on 3 points: frequency, quality of media and management options. On retrouve, including this information in what online life insurance comparison.
On the cost side, the best life insurance is free of charge and no arbitration fees. While savers who do not pay attention to it can pay up to 5% fee on each payment and 1% fee on each arbitration! Et Annual management fees on media in units of account do not exceed 0.60% for the best contracts.
In terms of media, the best life insurance in open architecture, that is, they provide access to funds managed by different distributors, which enriches the choice of accessible funds. The best reference contracts often hundreds of investment support. Real estate is highly sought after by investors, but not all contracts offer one, this is a point to watch out for and if you plan to diversify your real estate contract.
The last point to look at is how to manage it. The saver generally has the choice between free management and piloted management of his contract. With piloted management, the investor delegates the allocation and management of his contract. If this is the intended mode of management, one should not hesitate to compare the performance histories of the managements managed by different contracts, taking care to compare performance at the level of equivalent risk. The insurance generally offers you 3 to 10 allocation profiles.
Online life insurance often has the most advantageous features, and it is surprisingly at the top of the comparative life insurance rankings.
Life insurance: a very advantageous tax savings scheme
The success of life insurance can be explained by several reasons. In terms of taxation, policyholders benefit from an advantageous framework in several respects.
Life insurance is, like the retirement savings plan or the stock savings plan, a so-called capitalizing envelope. The saver can make their savings pay off in this envelope by benefiting from a privileged tax regime.
In fact, the profits made in the envelope are not so much imposed that the capital is reinvested in the contract. In detail, only the gains made on the euro fund support taxation along the water, as social security contributions (17.2%) are collected annually.
The taxation of most of the earnings occurs only at the time of the release of the life insurance, and again, the insured enjoys a preferential regime. The share of earnings on withdrawals made on life insurance of more than 8 years benefited from a reduction of 4600 euros per year. This discount is increased to 9600 euros for a married or married couple.
Take the case of a couple with life insurance with an overall rate of 200,000 euros, half of which would come from payments and the other half from investment gains (or 50% capital gain). This couple can make a partial withdrawal of 19,200 euros without paying income tax. In fact, the share of capital gains, 50% of 19200 euros, or 9600 euros corresponds to the amount of the rebate that benefits the couple. In this case, only the social security contributions (17.2%) will be collected on the part of material gains on the occasion of this withdrawal, ie a tax of only 1651.20 euros.
Life insurance is also an indispensable tool for transmitting one’s heritage. Because the designated beneficiaries of a contract can inherit the capital without paying inheritance taxes up to 152,500 euros. It is often said that an estate must be prepared well in advance, the life insurance illustrates this recommendation since the tax advantage on the estates mentioned above applies only to payments made on the contract before the 70 years of the insured. For payments made after this age, the succession benefits are considerably reduced.
This device can be combined with other existing devices, especially the rebate for direct line transmissions, dismemberment donations, etc.