Choosing the right life insurance policy from among the many products currently available on the market can quickly become a headache. Between the specific terms and clauses, understanding an insurance contract is far from child’s play for everyone.
Below you’ll find a list of the main factors to take into account to make the right choice and avoid common mistakes.
The different media
There are two main media;
The multi-support contract
A multi-support contract allows you to invest in a variety of financial and real estate assets with higher volatility. In principle, this contract is the most profitable. However, if you choose a multi-support contract, make sure you have access to funds from several management companies.
Single-support contract
A single-support contract is a low-yield guaranteed investment. Savers looking for stability and security can choose this option. If you don’t want to take any risks, this is thesafest option !
The different fees
The fees charged by the insurance company affect the profitability of your life insurance policy. It’s essential to take them into account when making a decision. The fees are :
Management fees
Management fees are deducted from your investment every year, reducing your return. The lower the fee, the better for you.
Payment charges
Deposit fees are deducted directly from the amounts deposited in your account. For example, if they are 4%, for every €100 paid in, €96 will actually be invested. The performance of your contract is therefore automatically affected. Fortunately, many online insurers offer policies with no payment charges. They are among the most advantageous on the market.
Arbitration fees
An insurer charges arbitration fees every time you change your unit of account or fund. If you prefer to manage your account yourself, this can be an important factor. Choose an insurer that charges the lowest possible arbitration fees. (A unit of account is a currency or medium of exchange). In this case, you can easily change the unit of account or medium.
Interest rates
Of course, your future investments must make money. The interest rate is one of the main factors to consider. But beware! Don’t be fooled by a superficially attractive rate. High fees may be lurking behind an overly generous contract.
When evaluating an annuity, disregard the rate and focus instead on the guaranteed net return. This value corresponds to the amount of interest less costs. In addition, look at the interest earned in previous years to assess the insurer’s management quality.
Internet comparators
Using an online comparator to compare life insurance policies is the best way to choose the right one. Thanks to this tool, you can simulate and find the best offers in just a few clicks. It’s free, fast and easy.
Zacharie est un journaliste français, rédacteur en chef du magazine TIH-Business et spécialisé dans tous les sujets liés à l’immobilier, la finance et l’assurance. Il est diplômé en journalisme de l’Université Paris-Sorbonne. Il travaille dans le domaine de l’immobilier depuis plus de 10 ans et il est aujourd’hui un expert dans ce domaine.
