Today, one of the favorite provident products of the French is life insurance. This formula has many advantages. Not only does it adapt to many situations and to different investor profiles, but it meets different investment objectives. In this article, we will focus on three of these objectives.
What is life insurance?
Life insurance is an insurance contract which guarantees the payment of capital or an annuity in the event of the death of the insured or which can be used as a savings product. There are two main types of contracts:
- Monoline life insurance is made up of an investment vehicle whose background is in euros. The paid-in capital is guaranteed and benefits from a minimum rate of return.
- Multi-support life insurance is based on investments in several supports (unit-linked, shares, bonds, shares in real estate companies, etc.). These investments are not guaranteed, but the diversification of investments helps ensure long-term performance.
Today, on the Internet, it is possible to find a recognized insurance contract online. The advantage of digital solutions is to offer a multiplicity of support that meets different needs among different savers and power profiles. get an overview of your savings at any time while carrying out all of its procedures online from its personal space.
Life insurance allows you to build up capital
The first advantage of life insurance is to be able to save a sum of money. It is advisable to subscribe for the long term to benefit from tax advantages after 8 years. It is possible to invest in a fund in euros and/or in units of account, which have a better return in the long term, even if this entails risks. To mitigate this risk, savers will invest in various financial and real estate assets. In addition, from the 8th year of subscription, the saver has the possibility of withdrawing €4,600 per year tax-free (€9,200 for a couple).
Life insurance to prepare for retirement
Unlike a retirement savings plan, life insurance allows you to make withdrawals at any time. These withdrawals are tax-efficient from 8 years after subscription. Many French people use life insurance to benefit from an annuity when they retire. It’s a way to earn extra income.
Insurance that protects loved ones
With life insurance, you can protect your loved ones by building up capital that you will be able to pass on to them at the time of your death. One of the advantages of life insurance is that you can name a beneficiary other than one of your family members. If the insured were to die, the capital would be transmitted either in its entirety or in the form of an annuity. Here again, it is interesting to start saving as soon as possible insofar as the capital is subject to inheritance tax if you pay more than €30,500 into your account after the age of 70.