Provision: is your family well protected?

Imagine the worst, look at the small lines of provident insurance contracts, nobody likes that. However, not all individuals are always as well covered as they imagine. “There are five types of provident insurance contracts in individual insurance: temporary death, GAV (life accident cover), funeral, dependency and hospitalization cover” explains Cyrille Chartier-Kastler, founder of the Good value for money site, which analyzes personal insurance. Often, temporary death also provide education annuity options to support part of the education of children in general until their 25th birthday.

The offer is so wide that it can be confusing. Some, wishing to do well, are tempted to stack the guarantees. “You have to see if all the contracts would be triggered in the event of a problem, some do not compensate if another insurance does,” warns Julien Male, director of social protection for the Crystal group, a group of CGPs for whom provident insurance is part of wealth management.

Basement. How to find it? “The basis is to protect your spouse and family, social protection is a base. We cannot build a heritage without starting by wondering what would happen after an accident or illness in the event of life and in the event of death”, explains Julien Male who notes misunderstandings. “In France, there is often confusion, in the event of life, the French think they are completely protected by social security and their complementary health”, notes the expert. However, this is not always the case. For example, in the event of a domestic accident (gardening, DIY in particular). The life accident guarantees (GAV) were thus created to pay a capital or an annuity if there are sequelae. Cyrille Chartier-Kastler advises to look in particular from what level of disability starts the contract (the law requires intervention from 30% disability, some contracts do it before). “In the event of medical error, they also compensate, they have a real utility while waiting for the investigation and the judgment to take place and for professional liability to come into play”, underlines Julien Male.

The level of pension cover depends on the professions. Employees are generally well covered thanks to collective contracts taken out by their company, but the social protection needs are not the same if you are single or if you have four children and a spouse working part-time , for example. “It is important to look at what the company contract provides and to match the guarantees with the protection needs” indicates Julien Male.

The self-employed are worse off. “The self-employed and the liberal professions often have insufficient guarantees,” says Julien Male. Common error: a doctor or pharmacist starts his activity and subscribes to a calibrated pension plan for his beginner’s activity, but does not think of reviewing the guarantees a few years later, when his income has doubled. It is then difficult to maintain one’s lifestyle in the event of a work stoppage.

Death insurance, an essential element of provident insurance, intervenes in the event of the death (or total loss of autonomy) of the subscriber. The latter has designated one or more beneficiaries and the capital paid to them will not be subject to tax. The amount of the death benefit is generally significant for employees under collective contracts. For individual contracts, it is different. “When the capital paid is around 30,000 euros, you have to be aware that in practice, this will not cover much”, regrets Cyrille Chartier Kastler.

Capital. How to assess needs? According to Cyrille Chartier Kastler, for a family with two children, the average budget to devote to provident insurance (GAV and temporary death) is around 800 to 1,200 euros per year. “For a 45-year-old executive, who has a child and an estate of 3 million euros, death insurance of 150,000 euros is insufficient, the death capital does not cover inheritance rights”, also notes Julien Male.

Individual life insurance rates are based on age and whether or not the subscriber smokes. “A 45-year-old who takes out a guarantee of 100,000 euros in the event of death or total and irreversible loss of autonomy pays an average of 350 euros over the year. At age 65, the annual contribution rises to 1,350 euros due to the drift in risk for the insurer as the insured increases in age,” says Cyrille Chartier Kastler.

It is possible to insure very large amounts of capital, which is of particular interest to entrepreneurs. For an insured capital of 10 million euros at Metlife, the CGP Crystal group indicates that the annual premium is 21,450 euros for a 50-year-old non-smoker and exceeds 48,000 euros for a smoker of the same age. For 1 million euros of insured death benefits, the premium is 961 euros for a non-smoker and 1,953 €euros for a smoker.

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