Life Insurance: 8 Tips for Good Contract Management

Life insurance, a French priority investment, is constantly evolving. Now that post-inflation net income has turned negative, euro funds are losing their way to unit-linked funds, but they are still at risk of financial market volatility. To optimize performance, remember to respect some rules of good deeds and manage your life insurance policy on a regular basis.

Overview:

  • Life insurance: Update investor profile

  • Life insurance: Adapt investment to risk sensitivity

  • Life insurance: change management methods

  • Unitlink Life Insurance: Adaptation to Financial Markets

  • Life insurance: build capital over time

  • Unitlink Life Insurance: Securing Capital Gains and Limiting Losses

  • Life insurance: follow the progress of contracts

  • Life insurance: Consider signing several contracts

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Life insurance: Update investor profile

Throughout your life, your wealth situation and your financial goals will change. Therefore, it is essential to regularly review the composition of life insurance policies. The best way to continue, and therefore the first action to take, is to update the investor’s profile. In addition, remember to plan your investment management over time, following the general recommendations of your insurance company.

With age, the distribution between euro funds (no risk of capital loss) and unit-linked funds (higher risk due to the effects of financial market fluctuations) can change. Within the unit-linked support, it is imperative to carry out regular arbitrage considering the level of risk. Remember to check the adequacy of your risk profile for the fund you invest in, depending on your age and your investment duration. For this reason, the “product sheets” of each medium commonly displayed on insurance company websites are full of information.

To know

The older you are, the less dangerous part of your investment should be. In fact, short investment periods do not adequately level out the significant dips seen in financial markets.

Life insurance: Adapt investment to risk sensitivity

The unit of account for a life insurance policy represents a more or less significant level of risk. For example, a fund that specializes in small and medium-sized enterprises (SMEs) has a different risk profile than a fund that targets a very large market capitalization. In addition, the risks inherent in biotechnology-focused funds are incomparable to those of funds targeting the world’s largest pharmaceutical companies. As with distributing investments between euro-based funds and account-based funds, it is advisable to regularly review the nature of the media selected. Careful consideration of portfolio composition and its performance allows you to make specific choices by increasing or decreasing the proportion of risky investments.

Life insurance: change management methods

It is also important to keep the management style dynamic. If you run out of time to focus on free management of your life insurance policy, we recommend that you choose management. Therefore, you entrust the monitoring of your investment and the realization of arbitration of your contract to a professional management company. Most insurers now offer this option to best support investors in the dynamic management of their investments. You can also (re) control the management of your account units, even if you have previously outsourced them. Indeed, it is often possible to ask your insurance company to (re) put your contract in free control.

Be careful

If you invest in a high-risk car, you can’t neglect to manage your life insurance policy on a regular basis, even for a short period of time. The potential performance of your savings and securing your capital gains depends on it.

Unitlink Life Insurance: Adaptation to Financial Markets

When you invest in unit-link life insurance, you are investing in the financial markets. They react and evolve according to a number of factors called “fundamentals.” Where are we in the business cycle? What is the future evolution of financial practices that has been at the heart of the problem since the 2008 Great Crisis? What is the psychology of investors? Is there a political risk? The market is generally down, do you need to take advantage of this to increase your account unit share in the hope of a rapid recovery? Numerous questions can overwhelm investors in the stock market, bonds, or other trackers.

In addition to these macroeconomic questions, other microeconomic factors can complement your belief when it comes to targeting a particular business sector. Is it wise to put your money in a fund specializing in oil services where investment spending seems to be picking up again? On the contrary, is it appropriate to prioritize renewable resources and avoid fossil fuels? What should we think about the future in terms of big data, artificial intelligence (AI), and even the Metaverse? We encourage you to act according to your beliefs when it comes to managing your account units and managing your Equity Savings Plan (PEA) or General Securities Account (CTO). They recommend increasing (or decreasing) their exposure to financial markets. Therefore, it is advisable to increase (or decrease) exposure to specific unit-linked vehicles for which performance is not guaranteed.

Be careful

For example, you can invest in a diversified fund that combines stocks, bonds, and real estate. If the insurer offers this type of unit-linked account, diversification helps pool the risk. This can be a central element of optimized management of life insurance policies.

Life insurance: build capital over time

Life insurance policies can be associated with recurring payments (month, quarter, semester, year). The amount paid may change at any time depending on your financial situation and your remittance may be interrupted whenever you wish. By regularly bringing new cash into your life insurance policy, you can continue to invest, even during periods of market downturn. This can provide an interesting outlook for future capital gains. In addition, this allows you to increase your financial assets on a regular basis with tailored savings efforts.

Unitlink Life Insurance: Securing Capital Gains and Limiting Losses

As part of the free management of life insurance policies, insurers provide tools to ensure capital gains. The next issue is to proactively modify certain arbitration management and programming rules. For example, if a media reaches a previously set revenue target, the recorded capital gains are automatically transferred to the media that is considered low risk. Next, I would like to talk about the “materialization” of customer’s added value.

Capital loss can be managed in the same way. In this case, the problem is programming the fact that when you lose a defined percentage of your initial investment, you “cut” support positions on an account-by-account basis. Here, set a “stop” to limit economic loss. Your lost positions will be automatically transferred to support that is considered less risky.

Life insurance: follow the progress of contracts

Life insurance is exposed to fierce competition among insurance companies. The latter competes for creativity to retain investors and attract new investors. They regularly contact subscribers about new and innovative management tools, or about the outperformance of one of the funds in the euro. Be vigilant and stay alert to get information on how to take advantage of new account units integrated into your contract, such as new investment themes, decision tools, new media such as trackers and live securities.

Life insurance: Consider signing several contracts

It may be advisable to have several life insurance policies. That way, you can do this with multiple insurers, or stay with the same insurer for simplification and avoid the use of two different internet management platforms. By subscribing to multiple contracts, you can assign management goals to each contract. Contracts can be managed in a dynamic and risky way with long investment periods, for example to benefit from additional retirement income. Another contract can be managed in a more conservative way to take advantage of preventative savings in the short term as needed. In addition, if you have multiple contracts, you can specify a specific beneficiary for each contract. A clause that should never be overlooked for your life insurance policy.

learn more:

Life insurance: Define and update investor profiles

Life Insurance: Understanding Product Sheets for Effective Investment

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