Choosing a life insurance contract means knowing the different solutions. Each investment strategy has its own contract.
Within life insurance contracts, the first difference is in the triggering element of the guarantee. A distinction is made between :
Life insurance “in case of life”: the contract provides for the payment of the capital or the annuity if the insured is still alive at the end of the contract. This type of contract serves the purpose of optimizing savings in terms of long-term taxation. Life insurance “in case of death” (or death insurance): the subscriber builds up savings for the benefit of a third party. The contract specifies that upon the death of the subscriber, a capital sum will be paid to the person of his or her choice, the beneficiary. This type of contract serves the purpose of preparing for inheritance. Mixed life insurance (or in case of life and death): at the end of this contract, the payment of a capital or an annuity is guaranteed, either to the subscriber, if he is alive, or to a beneficiary, if the subscriber is deceased. A second difference is in the “content” of the contracts: some contracts are invested in a single fund, others in several funds. The nature of these funds determines in particular the level of risk of the investment, and the savings strategy for which the contract can be used.
Single life insurance contracts
These life insurance contracts are invested in a single fund or “support”. This support is either a fund in euros (invested in low-risk money markets), or a fund invested in units of account (shares, bonds, units of open-ended investment companies (Sicav) or mutual funds (FCP), etc.).
This type of contract is in decline because it exposes the savings to a single strategic dimension and does not allow the investment to be modulated according to a personal strategy. The legislator is encouraging holders of single-support contracts in euros to opt for multi-support contracts in units of account, through the Fourgous amendment.
This system allows you to transfer your savings without losing the tax benefits acquired under the discontinued single-support contract. This possibility is available on the condition that at least 20% of the contract is invested in unit-linked funds. (see the article dedicated to the Fourgous amendment).
Multi-support life insurance contracts
These multi-support life insurance contracts are invested in several funds or “supports”. As a general rule, these contracts are partly invested in a fund in euros, to secure the invested savings, and in unit-linked funds (shares of Sicav or FCP shares, bonds or money market funds) to boost them. From then on, it is up to the subscriber to allocate his savings according to his asset strategy and the level of risk accepted.
These contracts make it possible to opt, over time and according to the risk profile, for different profiled management orientations, traditionally divided into 3 categories, prudence, dynamism and balance:
in the case of a conservative management, the part of investment on the funds in euros will be greater than the part invested on the supports in units of account; in the case of a dynamic management, the part of investment on the supports in units of account will be bigger than the part invested on the supports in euros; in the case of a balanced management, the part invested in euro and unit-linked supports will be equal.
Other types of contracts
Certain types of life insurance contracts are created by the public authorities to encourage a large-scale investment policy.