The 5 key elements for selecting suitable life insurance

 

1. The type of contract: in euros or in units of account?

One of the first points to look at is the form of the contract . There are two main types of life insurance:

• The euro contract: With this type of contract, your savings are invested mainly in bond assets. The profitability of these contracts is generally moderate, but the capital is fully guaranteed.
• The unit-linked contract (UC): Here, your savings can be invested in different asset classes (shares, real estate, etc.) via various supports such as UCITS or SCPIs. The returns are potentially higher, but the risk is also greater, because there is no guarantee on the capital invested.

Depending on your saver profile and your financial objectives, you can opt for a single-support contract (exclusively in euros or UC), or a multi-support contract which allows you to distribute your investments between several types of assets. You will then be able to find the life insurance that suits you .

2. Fees associated with the contract

Life insurance is subject to various fees which can significantly impact the profitability of your investment. It is therefore crucial to compare them before making a decision. Here are the main costs to take into account:

• Payment fees: They correspond to the percentage taken from each sum paid into the contract. Some contracts don't charge any, while others may charge fees of up to several percent.
• Management fees: These are the annual fees charged by the insurer for the management of investment vehicles. These fees generally vary between 0.5% and 1% of the capital.
• Arbitration fees: When you carry out distribution or media change operations (particularly in a multi-media contract), arbitration fees may be applied.

Tip: Negotiate these costs with the insurer or choose online life insurance, which often offers more advantageous pricing conditions.

3. The quality and diversity of the investment supports offered

In life insurance, it is important to examine the investment supports available within the contract. Indeed, they are the ones who largely determine the performance of your investment. To do this, take into account:

• The diversity of supports: a wide choice of investments (equity, real estate, money market funds, etc.) makes it possible to better spread risks and access different types of returns.
• Past performance: even if they do not predict future results, the performance of funds over several years provides an idea of ​​their potential profitability.
• The quality of management: opt for funds managed by recognized management companies that have proven themselves on the market.

4. Management options and guarantees offered by the insurer

In order to meet the specific needs of each saver, insurers often offer management options and additional guarantees in their life insurance contracts. Among these, we can cite:

• The “automatic pilot” option: this option allows you to entrust the management of your savings to the insurer or to a professional manager who will distribute your investments according to a determined risk profile.
• The floor guarantee: it offers downward protection in the event of a fall in the financial markets. Thanks to this guarantee, your capital will always be guaranteed up to a minimum amount, regardless of the performance of the UC supports.
• Automatic arbitrage options: these mechanisms allow you to secure your gains or limit losses in the event of significant variations in the financial markets.

Weigh the pros and cons of these different options based on your saver profile and do not hesitate to seek advice from a professional if necessary.

5. The flexibility of the contract and the quality of support

The last element to consider when choosing life insurance, the flexibility of the contract and the quality of the support offered by the insurer are also essential. In particular, be sure to check:

• The ease of making free, scheduled or exceptional payments on the contract, as well as the possibility of modifying their frequency and amount.
• Exit conditions (total, partial or advance redemption), taking into account possible penalties and implementation deadlines.
• The level of support and advice offered by your insurer in the management of your savings.

In summary, it is essential to take the time to study each aspect of a life insurance contract in detail before making a choice. A good contract must offer you efficient investments, adapted to your profile and your financial objectives, while being flexible and transparent in its operation