What are the Advantages of Life Insurance
Life insurance is the preferred investment. Thus, this investment continues to attract many savers, despite their profiles, the amounts paid, or their objectives. However, the multiple advantages it offers encourage many people to invest. These advantages do not stop only at the tax point but go far beyond learning about the benefits of life insurance here.
Life insurance is seen as a tax envelope because the money you put into it can be invested in many mediums. Above all, choose the best life insurance from the comparator you have chosen. Remember that there are two types of life insurance.
With this type of contract, your capital is placed in a secure fund which is in euros. Thus, this safe investment generates interest each year with zero risk of loss. The value of this type of contract is guaranteed by the insurer.
The Multi-Support Contract
This is a contract in which part of your money is placed in the euro fund. The other part is invested in riskier products, but with higher remuneration, including units of account. There is a wide variety of mediums that are available for the purpose of accessing the financial and/or real estate markets.
In addition, to choose one or the other type of life insurance, or the supports on which your savings will be positioned, several factors must be taken into account such as your risk profile, your objectives in terms of profitability, your age, your degree of knowledge of the markets, etc.
Life Insurance at a Good Rate of Return
For years, the context of life insurance has shown a drop in rates. Thus, the euro for life insurance remains on average a more profitable investment than secure products such as the Livret A, Livret de développement durable (LDD), or PEL.
In addition, the Insurance Federation has shown that the average rate of return increased by 1.10% in 2020. However, not all euro funds are identical. In general, banks and traditional insurers are struggling to give more than 1.5% while other institutions have still exceeded 3% net of fees this year. In addition, life insurance is also suitable for investors who are ready to take risks in order to have returned. There are units of account that are riskier than others.
Life Insurance is a Flexible Savings Contract
Contrary to what you think, savings don’t stop with life insurance. The capital, as well as the capitalized interest, are available at any time. When you need cash for a specific project, for example, you can make a redemption request. First, there is the Partial, which consists of recovering part of the value of your contract. Second, you have the Total, which aims to recover all while losing the tax anteriority of your contract.
With life insurance, you also benefit from progressive capitalization. This consists of paying one-off or regular bonuses according to your wishes. In addition, it is possible to request an advance from your insurer when you do not want to touch your capital but are in need of money.
At this level, you can also do the settlement of the contract on several modes. These include, among other things, a capital outflow, a life annuity outflow, an outflow in the event of death, i.e. the transmission of the capital (or an annuity) to the beneficiaries. which must be designated.
Life Insurance Enjoys Preferential Taxation on Redemptions
When redeemed, life insurance has strong tax advantages. First of all, it is important to know that when you make a partial or total withdrawal, it is made up of a capital part and an interesting part. The tax base consists solely of interest so that the share of capital is never taxed.
The taxation that is applied depends first on the age of your contract and then on when the premiums were paid. Apart from the reduced tax rate, the tax rate is optimal after 8 years. Indeed, it is an alternative to taxation under your income tax. Thus you will be able to benefit from an annual reduction in the interests generated by the contract. This is an amount of 4600 euros per year for a single person and 9200 euros for a couple.