Are you considering taking out life insurance? Do not sign the first contract offered. A comparison of life insurance will allow you to see that not all contracts are equal and that some are much more advantageous than others, both in terms of costs and profitability. Let’s take a look at the points to take into account to take out the best life insurance policy.
Why buy life insurance?
Taking out life insurance meets different needs:
- You want to save over the long term to build up capital or an annuity to compensate for the loss of income related to retirement;
- You want to grow your savings by diversifying investments and moving towards vehicles offering higher rates of return;
- You are planning your estate and are looking for a solution offering advantageous tax treatment.
Whatever your objective, a life insurance comparison is essential.
How to compare life insurance?
To highlight the best insurance, a life insurance comparator can quickly become essential. It reveals the characteristics of each life insurance contract to determine the best life insurance according to your specific profile.
You can also, like many Internet users, be interested in comparisons made by consumer associations which have an informed opinion on the subject. For example, each year, UFC-Que Choisir publishes a life insurance comparison . It highlights the rate of return of the different contracts, an important point for you. In 2021, in his online life insurance comparison, he shows that the returns are extremely variable for the fund in euros, they range from 0.70% to 2.10%.
Elements common to all life insurance
Comparing life insurance will allow you to see that certain elements are common to all contracts.
- First of all, all life insurance contracts charge fees, these being however very variable depending on the contract, we will come back to this later;
- Another common point between all the contracts: they offer different supports depending on your investment objective. However, the diversity is not the same according to the insurers and their contracts;
- Insurance companies offer to choose the mode of management;
- The taxation of life insurance is identical, regardless of the contract taken out. You will be taxed on the capital gains in the event of redemption, whether it is a partial redemption or a total redemption.
Compare fees
Purchasing life insurance requires paying fees. However, not all life insurance contracts are created equal. Making a comparison of life insurance allows you to find the most advantageous contract. Indeed, the fees applied charge your capital and significantly reduce the return on your life insurance. The costs of such a contract are as follows:
- Payment fees or entry fees: these are the fees paid each time you place money on your life insurance, whether it is the initial payment or subsequent free payments. Sometimes, fees of up to 5% of the sums paid are applied. Clearly, for payments of €1,000, €50 are deducted by the insurer. Know that by making a comparison of life insurance online , it is possible to find life insurance without management fees;
- Arbitration fees in life insurance : these are the fees you pay when you change your investment vehicles. Here again, with a life insurance comparator, you will discover that it is possible to take out a contract at no cost;
- Management fees: this time, you can’t escape it. However, not all insurers charge the same amount. Management fees can reach 1%, again this has a negative impact on your capital or on your term annuity. A reasonable life insurance policy offers management fees of 0.50 to 0.60% on euro funds and unit-linked (UA) funds.
Compare units of account
If all life insurance offers units of account, all unit-linked funds are not equal, making a comparison of life insurance is needed once again. First, it is necessary to compare the variety of media. For example, the Meilleurtaux Liberté Vie contract offers 700 supports. This allows you to diversify your investments to secure your savings.
On the other hand, beyond the variety of unit-linked funds, it is important to compare returns. The rate of return is extremely variable from one medium to another. Depending on your investment goals and the level of risk you’re willing to take, consider the returns on offer. It is advisable to compare returns over several years. The markets are bound to fluctuate strongly, the health crisis has proven this once again. To get an idea, look at the rates over the past 5 years to determine if the quality of support is consistent.
Compare management methods
You must choose a life insurance contract in euros or a multi-support life insurance contract that corresponds to your need and your desire to take charge of or delegate the management of your contract. Clearly, in terms of management, there is no better life insurance contract, but a contract that will meet your expectations. An online life insurance comparison is essential.
- Would you like to opt for the free management of your life insurance contract? Choose life insurance that allows you to manage your policy online. Payments, redemptions, arbitrations, make sure you have total autonomy to manage your contract as you see fit. We advise you however, if you choose the unit of account, to familiarize yourself with the markets in order to make the best choices and anticipate the fluctuations which could lead to a risk of loss of capital. On the other hand, with the fund in euros, you benefit from a guaranteed capital;
- You want to bet on a multi-support life insurance and vary your investments on different supports in euros and in units of account. Opt for managed management. Experts analyze your profile and your investment objectives to find suitable financial supports. They can place your money in several media and manage arbitrations when necessary.
The importance of online life insurance
You can take out your life insurance with your bank, your usual insurance company, or opt for a new provider. The life insurance comparator will offer you life insurance online. The reason is simple: a life insurance comparison shows that online life insurance generally offers much lower fees than traditional banks and insurers. However, as we have mentioned, the amount of the fees impacts your savings. You would rather make your money grow than give large sums to your insurer. Take out a life insurance contract with reduced fees, or even a contract without payment and arbitration fees, to hope for better profitability.
On the other hand, online life insurance generally offers a very nice variety of financial supports. However, we have mentioned, here again, that this is an important criterion if you are considering diversifying your investments.
The performance of online life insurance funds should also be taken into consideration. Comparing life insurance online allows you to see that digital players offer very interesting results.
Just because you buy life insurance online doesn’t mean you’ll be alone. Advisors remain, despite everything, at your disposal to answer your questions. You can gain autonomy by managing your contract freely while being supported, especially if you are considering a gradual investment and, little by little, a multi-support contract.
Can I have several life insurance policies?
Yes, it is possible to open several life insurance contracts, and this is a real advantage. We explain why.
Many of you have been led to take out a life insurance contract, in particular with your bank, on the recommendation of your adviser. However, a lack of knowledge of this savings prompted you to sign without really thinking about the quality of the contract. Today, you are a little more interested in life insurance and understand the impact of the characteristics of your contract on its profitability, particularly in terms of costs.
Remember that you have no payment obligation on your life insurance. Also, if you have taken out an unfavorable contract, you can now use our life insurance comparator to find a contract offering better conditions. Leave your old contract on standby and prefer payments over the new one by choosing a contract with no payment fees and with optimized management fees.
