For most policyholders, life insurance is primarily a great retirement savings product. It is true that it does not lack assets when aiming for this objective. But this placement is not just about that. It can also be used to secure savings in the medium term, much more profitably than with the cash products seen above. All you have to do is opt for a contract offering the possibility of investing 100% in the fund in euros without risk.
By choosing an Internet contract, without entry fees, there is even a way to grow your precautionary savings for a few months. Because contrary to popular belief, the money invested in life insurance remains available at all times. Of course, before eight years, the gains will be taxed, but compared to the current remuneration of the Livret A, the saver will always come out a winner.
The rates paid by the best contracts on the market still exceed the 1.5% threshold. The return on funds in euros has been steadily eroding for the past ten years. From 3.40% in 2010, it fell to 1.10% in 2020, and the 2021 vintage will probably be a little worse. But remember first that there is a counterpart to this low profitability: the savings invested are 100% guaranteed (no capital loss is to be feared). And then, these are average rates established on more than 250 contracts: if those of traditional bankers pull the average down, the best show much more attractive yields, well above 1.50%.
Your savings can be recovered at any time, within ten days. Life insurance suffers from a bad reputation when it comes to the availability of invested savings. Let’s establish the truth: whatever the contract subscribed, classic or Internet, you can ask at any time to recover your capital, in part only or in full, by making what is called a “repurchase”. Within ten days, your money will arrive in your bank account.
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More and more insurance companies are limiting access to their euro funds. Not all contracts are equal if total security is sought. Many insurers now limit access to their funds in euros, requiring that each payment a minimum of savings (from 25 to 50%) be paid into stock market or real estate funds. A constraint that can satisfy savers whose investment horizon is more than ten years, not those who want to temporarily protect their money from financial turmoil. The funds in euros of the contracts offered here are obviously 100% accessible.
The system in force is very favorable to the insured, especially after the eighth year. The tax reform, initiated in 2018, has rather pampered the insured: instead of paying 32.2 to 52.2% tax on earnings for an outflow of money before eight years, they now bear a single puncture by 30%. Above all, the allowances on earnings withdrawn after eight years – of 4,600 euros per year for a single person and 9,200 euros for a couple – have been retained. It is thus still possible to withdraw several thousand euros each year, without having to pay anything to the tax authorities.
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