Life Insurance: Understanding Product Sheets for Effective Investment

Insurance companies offer a variety of tools for choosing unit-linked vehicles that fit Saver's photo credit profile and beliefs: Getty Images.

Insurance companies offer a variety of tools for choosing unit-linked vehicles that fit Saver’s photo credit profile and beliefs: Getty Images.

In recent years, the number of insurance companies offering unit-linked products for life insurance policies has increased significantly. Many savers get lost, even though there are tools and indicators to see things more clearly. In particular, you can compare fund performance and make the right choices across different media, taking into account investor profiles and beliefs.


  • Life insurance: Know yourself well to manage account units

  • Four major categories of accounting units

  • “Play” the competition by comparing the units of accounts on the internet

  • Analyze performance history based on net asset value and volatility

  • Unit-linked performance: 3 indicators to make things clearer

  • learn more:

Life insurance: Know yourself well to manage account units

To manage life insurance policies as much as possible, attention should be paid to the investor’s profile, especially the percentage of risk assigned to savings. Indeed, investing in the account units of your life insurance policy does not guarantee your capital. This is one of the key elements of an effective long-term strategy.

You need to be careful when choosing dangerous media such as unit links. Like a stock portfolio, you buy, arbitrage, and sell. Therefore, you need to identify the media that best suits your profile and your beliefs as an investor. Managing the accounting units of a life insurance policy requires some knowledge and time to establish your own analysis to improve your personal choices.

To know

If there is no risk of investing in a fund in the euro of a life insurance policy, it depends on the unit of the account. Unit-linked products carry the risk of capital loss because their value depends on financial market fluctuations (rising or falling). In fact, insurance companies are committed to the number of units in their account, not their value. The recommended share depends on age, investment duration, financial knowledge, project, and risk sensitivity.

Four major categories of accounting units

Insurance companies provide a large number of unit-linked support, sometimes hundreds, for contracts managed over the Internet. These supports fall into four main categories:

  • Equity fund.

    This is the most commonly represented account category for contracts. They consist of securities whose valuations can go up or down. The risk is high and the potential performance is high. It is advisable to hold an equity fund for a long period of time (at least 5 years) to smooth out the inevitable market decline. Equity funds can be offered in specialized areas such as large cap, medium cap, small cap, geographic themes, sector themes, and types of management.

  • Bond fund.

    They are invested in government and / or corporate bonds. They generally show relatively stable and normal performance, but not very high. This depends on the level of interest rates and is itself linked to the issuer’s more or less risky profile. The higher the risk of an investment, the higher the potential return can be.

  • Decentralized fund.

    They are invested in several asset classes at the same time: stocks, government and / or corporate bonds, and sometimes even commodities such as gold and silver. Decentralized funds offer a fairly controlled level of risk and are therefore “between” equity funds and bond funds in terms of performance potential.

  • Real estate fund.

    It’s a matter of investing in “paper stones”, the stock of SCPI (Citizen Real Estate Investment Company) or OPCI (Organization for Collective Real Estate Investment). Given the evolution of the real estate market, unit-linked funds in this category are generally less risky than equity funds.

To know

More and more contracts allow you to invest in trackers (or ETFs). This is the way to study to diversify your investment. Trackers offered by insurance companies are generally based on geographic themes and are invested in stocks. Their performance is modeled on the performance of benchmark indexes such as CAC 40 in Paris, Euro Stoxx in Europe, or S & P 500 in the United States.

“Play” the competition by comparing the units of accounts on the internet

All insurers provide tools on their websites to make it easier to choose unit-linked vehicles and other collective investment schemes (OPCs). The latter is offered contractually according to category and some criteria.

If you hesitate to invest in large cap stocks in the United States and small cap stocks in Asia, you can use the selector to compare the “product sheets” of the various media offered. Therefore, you can choose to invest in a complete knowledge of the facts. It is also possible to compare funds between different insurance companies. This is because everything needs to present account units in a similar way (key figures, comparable statistics, historical graphs, and links to downloadable regulatory documents).

Therefore, you can examine the performance of the funds of multiple insurers offering very different offers, depending on the purpose and management method. For example, a unit of account that specializes in large-scale evaluations in Europe. Others have focused on small businesses in the telecommunications sector. Or a fund dedicated to growing companies (


) In the field of transition to eco-society …

Fund performance is often comparable to benchmarks. Therefore, for a recommended investment period (for example, 5 years), the performance of an active fund can be compared to the performance of an index. You can compare their performance before choosing your investment.

Be careful

OPC (Group Investment Business) is sometimes referred to as a “fund” or “account of account” in the management of life insurance. It may be SICAV (variable capital investment company) or FCP (community fund).

Analyze performance history based on net asset value and volatility

Net asset value (or NAV) is the last known price of support. This is the price you pay in euros to buy all the shares in the fund. NAV is established daily or weekly for real estate vehicles such as SCPI and OPCI. To assess a fund’s performance over time, it is essential to investigate how its net asset value has changed over several periods of time. Therefore, the fund could have been very dynamic for three months, but it shows very disappointing performance over the long term.

Be careful

“Past performance does not guarantee future performance.” This recurring warning should not be overlooked by investors. Indeed, the fund may have outperformed last year and recorded low returns the following year. Generally speaking, according to the so-called “financial market efficiency” theory, it is difficult to sustainably exceed the benchmark index.

Volatility is another characteristic of a fund that is scrutinized. It measures the amplitude of fluctuations in net asset value, that is, the mathematical standard deviation over several periods (often 1 to 5 years). High volatility indicates a high risk of irregular fund performance. Compared to other more “moderate” funds, it holds the key to the key expectations of profits (but also the risk of loss). Below 15%, volatility indicates a measured risk. Above 20%, the level of risk is considered very high.

Be careful

Measure the risks taken for savings. Within the framework of life insurance policies, it is equally important to pay attention to changes in the risk level of selected funds after respecting the recommended splits of euro-denominated funds and account units.

Unit-linked performance: 3 indicators to make things clearer


Evaluation of Morningstar ™

A benchmark for measuring account unit performance. For each account unit, you’ll see the performance achieved in that category, weighted by risk, volatility, and fee levels. The rating range is 1 to 5 stars.


KIID risk profile

As part of that, a rating of 1 to 7 is given. It measures risk in a standard way within the European Union. The higher the number, the higher the risk (and therefore the associated potential benefit).


Sharpe ratio

As part of that, we evaluate the performance of the fund compared to risk-free assets. For this, it takes into account volatility criteria. The higher the ratio, the more efficient the fund will be managed with respect to past characteristics. If the ratio is greater than 1, the investment is considered wise. Conversely, if the ratio is between 0 and 1, the risk take will appear to be high if the potential reward is low.

learn more:

Life Insurance: 8 Tips for Good Contract Management

Life insurance: Define and update investor profiles