Life insurance is a relatively old savings and savings system, but is up to date by the new savings management company FinTech.
In recent years, a new management company has entered the field of savings management by providing managed savings management services. These services provide competitive services based on a new generation of investment vehicles.
Also, the reference tax system these FinTechs use to manage their accounts payable is life insurance. This article describes how life insurance works and the benefits of FinTech for delegating savings management.
Life insurance: Savings and savings
As the name implies, life insurance is an insurance device. The amount paid by the subscriber to life insurance is capitalized within the contract. If the subscriber dies, the capital accumulated in the contract will be transferred to the designated beneficiary of the contract.
In this case, the law provides for important tax incentives. Therefore, each beneficiary of the contract can receive up to € 152,500 without paying the inheritance tax. Please note that this tax system applies to all payments made before the subscriber turns 70. Therefore, life insurance is an interesting means of protecting children and other designated beneficiaries of the contract (nephews, nieces, friends, etc.) in the event of death.
Life insurance is not only a preparatory system, but also a very interesting tool for building wealth. Indeed, the subscriber can work his money, and at any time can make a partial (or complete) withdrawal of his life insurance policy, and this is unconditional. Then the question arises. Why support life insurance over another savings scheme to manage your assets?
Life insurance has several advantages. Let’s see which one.
First of all, life insurance benefits from an attractive tax framework. This is true even if the subscriber dies, as we saw above, but it’s not the only one. Participants will also benefit from tax incentives if they partially withdraw from a contract of eight years or more. There is an allowance of € 4,600 for a share of taxable capital gains.
Another tax advantage is that life insurance is a range of capital. This means that the profits earned from life insurance will not be taxed as long as the money is reinvested within the contract.
Other benefits of life insurance relate to the potential offered in terms of capital allocation. Historically, some contracts only allowed investment in euro funds managed by the insurance company that manages the contract.
Currently, most (if not all) of the contracts distributed through banks, brokers and wealth management advisors are multi-support contracts.
In addition to Eurofunds, Savers can allocate capital to a variety of unitlink vehicles, including equity funds, fixed income funds, mixed funds, and real estate vehicles such as SCI (Private Real Estate) and SCPI (Private Real Estate). Real estate investment company).
However, in practice, most savers prefer to delegate the management of their savings. Therefore, they choose to delegate the management of life insurance. This is where Savings FinTech comes in. They provide managed life insurance management services.
Fintechs pay life insurance with dust
Multiple assets must be combined for delegated management (pilot management) to take effect.
First of all, there is the issue of the investment tools managers use to allocate capital within the contract. Traditional banks and most wealth management advisors typically allocate capital to traditional investment funds and avoid index funds.
The traditional investment fund itself is not bad, but it costs a lot of management fees. These costs are about 2% per year. It is no coincidence that life insurance brokers and banks divert their clients’ balances to these funds. Contract distributors receive retro commissions from these classic management funds.
Index funds are an alternative to traditional investment funds. A listed index fund (also known as an index ETF) is a fund that reproduces the performance of a benchmark stock market index. For example, the S & P 500 ETF is a fund that replicates the performance of the American S & P 500 Index. To duplicate this index, the fund simply models the allocation of the equity portfolio on the index.
This simplified management can significantly reduce fund management fees. This is about 0.20 to 0.30% per year (compared to about 2% of traditional managed funds). Asset managers such as BlackRock (the number one in the world) and Amundi manage hundreds of exchange-traded fund (ETFs) accessible to savers through securities accounts, equity savings plans, or life insurance.
Thanks to the low management fees, index funds can achieve excellent performance after deducting fees. The performance of these funds follows the performance of the index. Therefore, Saver will not be disappointed by the manager he is entrusting with capital.
Unfortunately, clients who delegate life insurance management to traditional banks, brokers, or wealth management advisors rarely benefit from index funds. Distributors do not benefit from ETF retro commissions and therefore favor traditional managed funds to allocate capital invested in life insurance under controlled control.
However, the situation is changing with the advent of new savings players offering managed management services based on index funds. The most well-known fintechs include Yomoni, Nalo, WeSave, Ramify and Goodvest. These companies commonly need to allocate their portfolios to diverse baskets of ETFs. What is important is a significant cost savings for the saver.
Fintech Goodvest sets itself apart from other fintechs by providing managed management invested in funds that respect the environment and are particularly interested in climate issues (Fintech Goodvest). Good best review Here is to learn all about this FinTech responsible management).
In general, FinTech stands out positively and often offers a more complete and competitive service than traditional players. In fact, FinTech often offers more allocation profiles, resulting in better customization (up to 100 risk profiles compared to traditional player 3-4 profiles) and more competitive pricing. Offers.
Saver saves 2-3% annually on the overall fee applied to his capital. FinTech has digitized its services on a large scale to enable it to deliver more at less cost.
Saver manages savings remotely from a web application. Fintech relies on new technologies such as robo-advisors. Robo-advisor is a decision support algorithm for wealth management. This allows you to automate certain tasks.
In recent years, FinTech’s assets under management have increased rapidly. It is a success not by chance and provides life insurance with highly effective managed management in terms of both asset allocation (and therefore performance) and personalization of allocation profiles.