life insurance or PER?

Life insurance remains the flagship investment of the French, and has been for several years. In 2019, another competitor appeared: the Retirement Savings Plan (launched by the PACTE law). Both contracts offer very attractive tax benefits. It can therefore be difficult to make the right choice. Profitability remains one of the criteria to be considered. Life insurance vs PER ; what is the most profitable investment?

Update on the profitability of life insurance and that of PER

According to figures released by INSEE, the gross profitability of life insurance stands at 1.50% for the 2021 financial year. For comparison, the rate of return on the best PERs stands at around 1.35% in 2021. We are talking here about the remuneration of funds in euros which are both eligible for life insurance, but also for the PER.

Of course, the PER allows you to invest in units of account (UC) just like life insurance. They are more profitable, theoretically, but are more risky. In general, savers prefer to place their money in less risky vehicles, such as euro funds, at the start of the savings building phase. They then begin to invest more in risky vehicles such as UC and other financial vehicles (SCPI, SCI, SICAV, etc.).

According to financial experts, PER offers a good rate of return compared to life insurance. As a result, payments made during the savings phase are deductible from taxable income. They therefore benefit from a tax exemption.

Life insurance and PER: eloquent figures for the 2021 financial year!

Investments dedicated to preparing for retirement are not lacking in France. There is something for every taste. At the top of the list are found in particular life insurance, whose outstandings reached 1,876 billion euros at the end of 2021, according to France Assureurs.

For its part, the PER was held by 2.6 million savers on 31/12/2020. 73% of contracts are individual PERs. Obviously, these are eloquent figures for life insurance and PER.

It should be noted that net life insurance inflows have remained exceptional since 2011. They jumped by +€2.2 billion in March, and by +€8.4 billion in the 1st quarter of 2021. billion euros in contributions were paid on life insurance contracts in March 2022, an increase of +1.1 billion euros compared to March 2021.

Units of account (UA) represent 39% of contributions for the month of March and 40% since the beginning of the year. 12.1 billion euros in benefits were recorded in March 2022. They therefore increased by +0.8 billion euros. Benefits from funds in euros increased, rising by +0.6% to 9.8 billion euros. They are significantly higher compared to unit-linked units, which rose from +0.2% billion euros to 2.3 billion euros.

The PER, for its part, finally crossed the symbolic threshold of 3 million policyholders in March 2022.

Let’s not forget that the transfer of a life insurance contract to a PER is entirely possible. In the 1st quarter of 2022, 128,000 contracts were already transferred under the PACTE law (excluding transfers of pension insurance contracts to a PER), compared to 76,000 in the 4th quarter of 2021. In total, €4.5 billion were were transferred in Q1 2022, compared to €3.1bn in Q4 2021.

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