In just a few years, the whole area of life insurance has changed. The reason is simple: the arrival of new financial institutions in this sector, offering their products directly over the Internet.
The first consequence of this evolution has involved service fees. Often present, right from the opening of accounts, online banks have in fact used to diminish and even, for some, to make them disappear. Nevertheless, today, insurers on the web and traditional contracts and coexist with very different performances, and costs to present every moment of life insurance.
It keeps, however, affect the good results of the latter which continues even today to be the favorite of the French savings in terms of capital invested before the Livret A.
Mainly five types of fees are found in virtually all life insurance contracts.
<> Costs Life Insurance Investment <>
First of them to be billed, fees. These are indeed due upon signing the contract. They are payable only once and are often confused with fees that have nothing to do since about the payments.
These fees, therefore, are often reduced to a sum not exceeding 50 euros since and to cover administrative costs of registration of the contract. While many institutions have now abandoned these charges by making even one of their business case, for others it is quite possible to negotiate. This is not the case for collective contracts. The latter, concluded between the insurer and an association to which each adheres insured, do indeed any individual negotiation. They are then often at the expense of joining the association.
Other charges very common, reports of payment. Otherwise known as entry fees, they are primarily charged by traditional banks, distributors of life insurance contracts. Indeed, banks and insurers online, in their vast majority, following their appearance in this segment in the early 2000s, abandoned these charges often very expensive, especially for small savers. Their principle is the percentage charge on all payments since the opening of the contract. The capital is well placed systematically amputated. The banks shall, however, regularly, to promotional campaigns to receive payments without deduction for a limited time.
<> The management of pay life insurance <>
Other costs unconditional life insurance, management fees. These relate to the operations performed on the contract, throughout his detention, placement in either euros or MPT funds. Their samples are, in turn, defined within the contract, due in principle annually. The total amount is on average between 0.5 and 2% of the amount of savings. They are often slightly higher in institutions offering contracts online.
They are paid from interest earned on investment for all funds in euros. For any investment in units of account, the calculation is instead on the value of each share or the number of units. They are, thus, higher on the latter.
These management fees may also be multiplied with, following the establishment, implementation management fee of investment funds, not to mention the transaction costs of these funds.
Focused solely on MPT contracts or units of account, the underwriters are liable for costs of arbitration. These concern the transfer of shares from one medium to another. Their calculation is performed on the sums involved in this change and is expressed as a percentage. The costs of arbitration is often the equivalent of 1% of the amounts so tilted.
Several banks offer life insurance contracts apply a flat rate or application of a minimum investment. Others apply, however, a minimum amount of sampling, which can also be capped. Finally, banks and insurers online have often made it a principle to include in their commercial offers, free of a number of arbitrations per year. The best bid is then often a function of the amounts to invest and move from one medium to another.
Finally, last costs traditionally collected, checked off the cost. Although less common, they are however still available and require greater attention following the perspective of saving everyone. Indeed, without consequence for a long-term investment, they are however very disadvantageous for the short term.
Their principle is simple because instead of taking a percentage from each payment, the financial institution determines that the first filings are used to pay fees in advance, may well amount to a package. Often attached to one or two years with regular payments, then this corresponds to dispose, at the end of this period, a zero capital. After this period, payments are then free of any withdrawal. Hence the interest not to enter such contracts for an investment in the long term. To ensure better visibility to the subscriber's contract, the law now requires the insurer to provide, upon signing the contract, a table showing the values of future redemptions after the scheduled deposition.
The costs are particularly numerous on investments in life insurance. Also, it is necessary to take this into account in any comparison to avoid any unpleasant surprises. However, to simplify matters for investors, more and more schools now report their returns net of fees. A good way to know with more precision the exact amount of interest and capital gains that each policyholder can expect ... while keeping in mind that every investment in cross-channel and unit of account, corresponding to stock market investments, remain uncertain about the results to be expected.
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