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Faced with a lack of clarity on the fees applied to life insurance contracts and PERs, the government has decided to standardize their presentation. Good news for savers!
Since June 1, banks and insurers have been required to publish a summary table of costs for their life insurance contracts and their Retirement Savings Plans (PER). A new document that should make life easier for savers who want to compare the fees for their current contracts or for subscribing to a new product. What information is available? Which should you watch first? The means to play the competition effectively, and to make serious savings.
A new comprehensive and standardized fee summary table
From now on, a table summarizing the costs is available on the websites of all the distributors of life insurance and PER contracts. A document imposed by law which includes a large number of tariff lines applied to these savings contracts. Until now, the comparison between the contracts within the same company or with the competition was complex: it was necessary to seek all the information in the general conditions, with a presentation which could vary from one manager to another. . With the new summary table of fees, the problem is solved: the presentation of this document is framed by law and is standardized.
Thanks to the harmonization of practices, consumers will be able to compare contracts more easily. For life insurance contracts, the list of costs begins with the minimum initial payment to be able to subscribe and membership fees. Then come the management fees for euro funds, unit-linked funds (equities, bonds, real estate, diversified) and euro-growth funds. For clients who opt for managed management, the inherent costs are also notified. The last part of the document will group together the so-called “one-off” costs, but which are not always so, for example the costs on payments and the arbitration costs which may arise several times a year depending on the management of its contract.
For the PER, the list of fees is almost identical, with the exception of one addition: the fees for management driven by horizon. This fee category is detailed for each different profile, namely conservative, balanced or dynamic, with an allocation with an exit horizon of 20 years.
Read also: Retirement: between PER and life insurance, which investment to choose?
How to choose the best PER or the best life insurance?
The harmonization of practices pursues a clear objective: to enable consumers to save money by bringing competition into play. Bruno Le Maire, Minister of the Economy, explained on this subject: “We take up the principle of price comparators from large retailers, which have proven themselves”. A position also defended by Gilles Belloir, director of Placement-Direct: “The table contributes to the improvement of financial knowledge. A better knowledge of the costs also contributes to saving money”.
On the other hand, other professionals in the sector call for vigilance, such as Philippe Crevel, economist and director of the Cercle de l’épargne: “As we ask a lot of insurers, we may be drowning out essential information for consumers: “I put in 100 euros, how much do I have at the end of the year?” What matters is performance.” In fact, in addition to the summary table of fees that has already come into force, a second document will become mandatory from July 1, which will include all the fees for each unit of account marketed.
The fees charged… but not only!
This new addition on July 1, 2022 could be a double-edged sword: “Too much information kills information” sums up Philippe Crevel. The level of costs of a contract or a unit of account is part of the information to study before making a choice, but should not be the only data taken into account. Other information is also of paramount importance, such as the level of risk of each medium, but also its potential future return. Gilles Belloir delivers the following conclusion: “You should not focus only on the costs but also look at the risk-return ratio to make your choice of media”.