What to know before committing
The taxation of a life insurance contract is lifted after eight years from the date of subscription. In other words, capital withdrawals are no longer subject to income tax after this period. To get the most benefit from this investment, it must therefore be considered over the long term. If necessary, a partial or full redemption of the contract is possible. Funds advanced by the bank must be repaid within a maximum of two years.
Good to know: unlike the Livret A which must be unique and taken out with a single financial institution, there is no limit on the subscription of life insurance. This means that you can open two or more contracts in order to multiply the sources of profit and to play the competition. Please note: a signed contract cannot be transferred or entrusted to another service provider for management.
The different types of life insurance
Do not hesitate to compare the offers before making a firm decision. On average, there are between 500 and 1000 different contracts. Let us mention in particular:
- Multi-support contracts, which allow investors to diversify their investments, most often by associating funds in euros with units of account.
- Monosupport contracts, solely based on the savings plan (increasingly rare, because less profitable because of the drop in rates).
- Eurocroissance contracts, which offer a good compromise between risk and profit, thanks to 100% guaranteed support (no financial loss).
How to choose life insurance adapted to your investor profile?
As each contract is different, it is important to use a few common criteria to select the best performing investment. Do not hesitate to ask for an evaluation of the net performance of a contract. You can do the calculation yourself since you only need to subtract the costs from the profits. Note that the level of management of the chosen contract will necessarily impact its cost. Commissions vary between 0.5% and 1% of the starting capital. Make several quote requests to make a more informed choice.
Even if your bank adviser promotes risky investments ensuring you a significant capital gain, choose only the diversification programs with which you feel comfortable. You have the right to prefer security to potential gains which can be impacted by the decline of the markets. Either way, trust your instincts!