What Life Insurance To Choose In 2022? Comparative

How to choose and manage your life insurance contract?

It is important to note thata life insurance contract is not transferable ! In other words, if you want to change the contract, you will have to close it… at the risk of losing the tax advantages linked to its age. Therefore, it is important to choose it carefully. Here are five things to check before you set your sights on a contract:

1/ Ensure the quality of the materials offered

A simple way to ensure the quality of a contract is Take a look at the returns on your funds in euros. The average return during 2020 was around 1.3%, but some funds have reached 3%! Check out our article on best euro funds available in 2022.

For multimedia contracts, make sure that offer a sufficient number of Units of Account so you can properly diversify your portfolio. The most common units are UCITS, but some insurers provide access to ETFs (these famous “trackers” that track the performance of an index) and SCPIs (real estate funds). In our opinion, it is important that if you take out life insurance in 2022, you choose one that offers ETFs, as we explained in our guide to investing in ETFs, these have lower real estate costs compared to UCITS (on average 0.4% compared to to 2% or even more for UCITS). Lower costs logically means more performance, especially since we cannot know in advance which UCITS will be the best this year. We detail the best ETFs available in life insurance in another article.

Feel free to do some research on the different CPUs to validate their quality! sites like Morning Star analyze the different investment funds and give them a rating based on their performance and quality.

2/ Opt for a contract with reduced costs

Our advice is firstavoid contracts with entry and exit charges (which can sometimes reach up to 5%!). This is a common practice intended in particular to remunerate the contract distributor. Today, with the rise of online contracts, subscribe directly and avoid these costs! Of course, we have not selected any contracts with such costs, because we believe that a loss of up to 5% of the capital before it is invested is a handicap that weighs down future performance too much.

Management fees are, of course, a criterion to take into account. Indeed, the insurer that manages your contract takes a percentage of the amount each year, whether it is placed in a euro fund or in UC. Commissions on funds in euros are around 0.6%/year while the UC management fees are slightly higher, around 0.85%/year.

Attention, if you choose a multiple support contract with the ambition of making it evolve over time, Please note that the arbitrations you carry out (reallocation of your assets between different CUs and Euro funds) may incur arbitration costs! If you intend to be active, then it is better to favor a contract that does not provide for arbitration costs.

Finally, as we said before, we must not forget investment costs, UCITS, SCPI, ETF… To analyze them, it will be necessary to look at the small lines of the contract.

Some contracts like Yomoni have understood this problem well and have cut costs to the extremeup to 1.6% all-in: hard to beat.

3/ Beware of the limitations of the contract

If you are allergic to risks, take a good look at the insurer’s conditions! Some may force the saver to allocate part of their payments in UC (part that will not be guaranteed). This can be up to 50% of payouts! These limitations are often found in the case of investment in euro swap funds and real estate funds, which have higher yields than traditional euro funds, but limit their fundraising.

In itself, if you are aiming for a very diversified and daring allocation, this will not be a problem: for example, the contract Empowering the future of insurancevie.com is ideal for savers looking for many diversified investments (ETF, real estate, etc.) to aspire to greater profitability, and precisely, its two Suravenir euro funds require a minimum investment of 30% and 50% respectively in UC (50% for the most opportunistic with better profitability). On the contrary, the contract evolution of life does not require a minimum CU to access their euro funds, but offers fewer units of account and is therefore more suitable for those who wish to invest a very large part of their allocation in euro funds (whose return can be increased even duplication!). Therefore, it is necessary to carefully observe these details to find the most suitable contract.

4/ Management by mandate or free management

You can choose manage your contract yourself (free management) or from delegate this task to a professional (discretionary or delegated management).

If you do not want to take any risk by investing 100% of your capital (or almost) in funds in euros, it is useless to entrust their management to a professional because there is nothing to manage (you would pay fees for nothing). All you have to do is select the fund yourself and possibly some CUs (real estate investments or global limited risk funds), and check from time to time during the year to see if the CU holding doesn’t exceed 10%.

The question arises more for “moderate” to “aggressive” profiles that invest all or part of their portfolio in UC. Whether it is the initial allocation of the portfolio or its follow-up over time, the contribution of a professional can be significant. Especially if your financial education and/or interest in these topics is low. If, on the other hand, you are very interested in the economy and the stock market, it may be interesting because of your culture to know and manage your allowance yourself, asking for advice if necessary.

5/ Diversify your Units of Account

If you invest all or part of your portfolio in UC to increase your return, take the time to choose wisely. Search the Internet for information about UC (managers, performance history, etc.) and distribute your assets among different media. Diversify both by product category (types, equities, hybrids, SCPI) and by geographical areas (Europe, USA, emerging, etc.).

For example, you can choose to put 10% in a global equity fund, 20% in a rate (bond) fund and 10% in an SCPI. Conversely, avoid putting 100% of your UC in a fund that invests exclusively in French stocks, this would make you too dependent on the French economy.

You can also use the discretionary management to leave the assignment to a professional! You just have to choose a risk profile and the manager will do the rest.

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How much is online life insurance worth?

online life insurance policies they are almost identical conventional life insurance contracts:

  • The insurers that manage and insure these contracts are the same : this is for example general (one of the largest insurers in the world), surfuture (an insurer belonging to the Crédit Mutuel Arkea group) or even Spirica (subsidiary of the Crédit Agricole group);
  • An online contract entitles you to same advantages and with the same guarantees than a traditional contract. Subscribing on the Internet, therefore, does not imply additional risks;
  • online life insurance policies offer as much support (euro and unit-linked funds), or even more, than traditional contracts.

So what is the difference between online and traditional life insurance?

  • Online life insurance is freethat is, they do not apply envelope costs: neither opening nor closing the contract, nor arbitration, nor even payments… On the euro fund and the units of account, only management costs are applied, which are levied by the insurer regardless of the type of contract (online or classic), generally around 0.2%/year;
  • Online life insurance is distributed by online establishments. Remember that life insurance is never distributed by insurers, but by approved distributors (usually banks). For example, a Boursorama Vie contract will be distributed by Boursorama Banque and managed by the insurer Generali. Online contracts are distributed by online banks or specialized dealers, who do not charge any fees!
  • Online life insurance is managed entirely online (opening, closing, management, etc.). In the event of a problem, you can contact a support service by phone or email.

What life insurance to choose?

We have selected for you the best contracts in free management and management under mandate. Browse our dedicated reviews for more details.

Our contract selection criteria

Given the multitude of existing life insurance contracts, comparing them can be complicated and time consuming. That is why we have studied more than 50 contracts, to select those that seem most interesting to us. The criteria we have chosen are:

  • High Yield Euro Funds
  • Reduced management fees
  • Sufficiently diversified unit-linked supports
  • Online subscription solutions and convenient contract tracking interfaces

We carry out this selection on contracts in free management and in management under mandate, which gives us a double selection.

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