Where to subscribe? What to invest? At what expenses and what taxation expect? Why use life insurance to prepare for its succession? As many essential points to understand how this famous savings product works.
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It is not without reason that the life insurance of “Swiss knife” of savings are often qualified: its extreme flexibility allows him to adapt to a wide range of heritage needs, to all the moments of life.
But before subscribing to this product and discover the extent of the possibilities, it is better to control the basic functioning.
- What is life insurance?
Nothing! Contrary to what its name suggests, it is not an insurance but an ordinary placement product. His name is the fruit of history: Originally, life insurance guaranteed the payment of a capital to his subscriber if he was still alive at an age or a given date.
It must not be confused with the death insurance which, it provides for the payment of a capital, the amount of which is fixed by the contract, to beneficiaries if the insured dies during the period of insurance.
- from whom can we subscribe this product?
It is proposed by many institutions: banks (through a subsidiary), mutuals and insurance companies, wealth management advisers but also insurance intermediaries, such as general agents, Physical or online brokers, etc.
- Why are we asking me to designate beneficiaries?
When you subscribe to your contract, you will need to enter the name of the person (s) to whom the insurer will have to assign the capital of your contract if you die. This is an important point, which conditions the tax and civil benefits during the successions.
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- on which media can we invest?
- What is the fee?
- Is my savings blocked for eight years?
No, the amounts invested in life insurance remain constantly available and do not support any blockage. It is generally sufficient of a few days or weeks to recover them when needed. The term of eight years is recommended for tax reasons: it is from this course that taxation is the most advantageous.
You can choose between the fund in euros, guaranteed, and “units of account”, which are indexed to the value of financial products underlying. This is usually an advisory business where you have chosen to take that will help you determine the best allocation between these compartments, depending on your goals, your heritage and answers you to the questionnaire which will have been submitted at first contacts.
Life insurance has a reputation for being fairly heavily loaded in charge, but there are significant differences between institutions and intermediaries. You will generally pay fees in installments (up to 5% of the amount invested), the annual management fee on accumulated capital (from 0.5% to 1%), and arbitration fees when you modify the distribution of your savings (through, for example, a stock fund to a bond fund).
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