Choosing life insurance in 2020: how to do it?

A very popular investment with the French, life insurance allows you to build up savings over the long term, which can provide regular additional income or finance various personal projects. The capital invested can also be passed on to the beneficiaries of the contract. To carefully choose your life insurance in 2020, you should check its performance and understand how it works. This choice will also be made according to each person’s profile and their taste for security or risk.

Great operating flexibility

Life insurance is rightly known for the freedom it leaves to the saver. It is up to you, however, to choose a contract that gives you all the leeway you want.

If you do not want to manage your life insurance yourself, check that it is possible to delegate management to your advisor. If, moreover, you do not have a significant personal contribution, check with the bank if it is possible to subscribe to the contract with a modest starting bet.

You can also choose your life insurance according to the possibility that it leavesmake free paymentsthe frequency and amount of which are left to your convenience.

The variety of output modesin capital or in life annuity for example, is another element to be taken into account.

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An investor profile to be specified

To choose the best life insurance, the second overall criterion to assess is the degree of risk you are willing to take.

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If you care about a absolute guarantee of your capitalyou better subscribe a so-called monosupport contract. This fund in euros, mainly invested in bonds, is indeed very safe. The capital is guaranteed at all times and, thanks to the so-called « ratchet » effect, the accrued interest is also acquired.

If you are willing to accept a share of risk, a multi-support contract will be more appropriate. Alongside a fund in euros, it also includes what are called units of account, made up of securities or real estate investments. It is by varying the number and nature of these units of account that you will obtain the best return on your life insurance.

Indeed, the yield of these multi-media contracts, partly composed of units of account, is on average higher than that which attaches to funds in euros. On the other hand, these contracts are more risky, because the part of the capital invested in units of account depends on the fluctuations of the stock market.

This statement, however, needs to be qualified. Life insurance being a medium or long-term investment, the losses of one year can be largely compensated by the gains of another.

Costs to consider

It is recommended to choose a life insurance policy with the lowest possible management fees.

In your interest, it is better to prefer contracts that do not include entry fees and limit administrative management costs. Similarly, fees are most often levied by the companies that manage the chosen investment vehicles.

These fees are, as a rule, quite high. It is therefore better to spend a little time researching the supports, and there are some, which incur the most moderate management costs.

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Similarly, it is preferable to avoid contracts that charge fees on your payments or on redemptions of your savings.

The quality of service

To choose the life insurance policy best suited to your needs, you must also take into account the quality of the service offered.

If an adviser gives you clear details on how often to send account statements, on the deadlines for implementing payments or on how to modify the beneficiary clause of your contract, then you will have reason to choose this establishment to conclude your life insurance contract.

The precision and clarity of the information are indeed an integral part of the quality of service to which you can claim. The existence of legal or tax assistance will also be appreciated. Similarly, the ability to perform certain operations online can be a significant asset.

If you are used to surfing the web, you will appreciate the existence of a dedicated application, which allows you to view and manage your life insurance from a smartphone or tablet.

On the other hand, if you are not very comfortable with these new technologies, it is better to opt for a life insurance policy with more traditional management. In particular, you will be able to take advantage of the presence of an advisor who will give you appointments and not just virtual recommendations.

If, as a bonus, the office that offers life insurance is located near you, this geographical proximity can also play a role in your decision to choose a particular contract.

Read also: Shopping for life insurance online: our advice

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