This envelope, managed by an insurer or a mutual fund, provides access to numerous investment vehicles, from the most prudent to the most dynamic, invested in different asset classes or geographic areas. These supports can be guaranteed in capital (euro funds), or carry a risk of capital loss in return for a greater potential return (units of account). Asset allocation is carried out based on the investor profile and investment horizon.
Its flexibility of use and the relative liquidity of capital make it a preferred asset management tool., as a subscriber/member, it is possible to make one-off or regular payments depending on your savings capacity and the capital remains available if needed.
Life insurance helps meet five financial objectives.
1. Build up your capital
Taking out a life insurance contract meets the financial objective of building up capital over time. Depending on a specific savings capacity, it is possible to fund the contract at any time through one-off payments or to make regular savings through scheduled payments.
2. Enhance your capital
Life insurance is a way to grow your capital. The available supports offer the possibility of constructing an asset allocation in line with the investor profile and investment horizon.
Euro funds have the advantage of guaranteeing the capital at least up to the net premiums and of capitalizing the “interest” acquired year after year thanks to the ratchet effect. Thus, not only is the invested capital protected but it progresses regularly. Euro funds are generally mainly invested in bonds, but can be partially invested in stocks or real estate.
Unit-linked funds make it possible to invest in more dynamic asset classes in order to capture the potential rise in financial markets but, in return, present a risk of capital loss.
3. Receive additional income
The life insurance contract allows you to receive additional income through regular or one-off partial redemptions (see here the taxation of life insurance redemptions ).
These redemptions benefit from preferential taxation, with only the “interest” share on each redemption being taxed. Furthermore, the conversion of the capital into a life annuity ensures guaranteed income for life in return for the unavailability of the capital.
4. Pass on your heritage
Life insurance allows you to anticipate and prepare for its transfer. By designating beneficiaries, the subscriber ensures, upon his death, the transmission of capital to his descendants, spouses and/or family, outside the rules of legal inheritance. He can also designate a beneficiary outside of any family relationship, or even an association.
5. Protect your spouse
Life insurance is a wealth management tool to improve the situation of the surviving spouse . By designating the spouse as beneficiary of the contract, it is possible to grant him or her a greater share of the inheritance than that which would normally accrue to him or her in the estate. Indeed, subject to clearly exaggerated premiums, life insurance contracts are not subject to legal inheritance.
Life insurance also allows you to protect your cohabiting partner or civil partner whose interests are not preserved by civil inheritance law , which considers them to be third parties to the estate. Beyond the transfer of capital, certain contracts concluded in the form of a life annuity for the benefit of the subscriber protect the surviving spouse thanks to reversion.
The articles published on this blog were written by Primonial and are for informational purposes only. They are not intended to be exhaustive and remain of a general nature. Furthermore, the assessments made reflect the opinion of their authors at the date of publication and are likely to change subsequently.
Neither the articles nor the information contained therein can be considered as investment advice, an investment proposal, an offer or solicitation to purchase, subscribe or sell a financial instrument or any other product and investment support.
The legal and tax information contained in this document is current at the time of its publication and may be modified subsequently. The simulations presented were carried out based on financial hypotheses and the regulations in force to date; these elements are subject to change. The information contained in this document has been taken from sources believed to be reliable and up to date at the time of publication, however its accuracy cannot be guaranteed.