Life insurance is still considered a priority investment for French people. But as we know it, this term is abuse. Life insurance is not an investment, but an investment package that defines applicable taxes and succession rules, but does not indicate anything about the nature of the investment contained in it.
Unitlink Life Insurance: Are There Too Many Choices?
Let’s talk about investment vehicles. Euro-denominated funds, a safe haven for life insurance policies, are becoming less and less profitable. Savers have long understood that they must rely on unit-link units, which are risky but can have high wages.
However, you need to navigate through a wide range of account units offered by insurance companies. Because there are many options. Some contracts indicate that hundreds (if not thousands) of account units are available.
In the 21st century, stock selection is no longer an issue. It has been proven many times that the best way to choose a security to put in your portfolio is to buy everything without thinking. Paradoxically, but realistic, and especially cheap, it increases your performance potential by the same amount. Keep in mind that the choice can be costly in time (when investing alone) or administrative costs (when delegating this part). ..
Therefore, you need to choose an ETF from the thousands of available account units. These index funds have compressed costs that follow only fully transparent indexes. In that case, the universe is fairly limited and consists of completely economically efficient products.
Asset allocation: the key to life insurance performance
The work is not finished yet. It is now important to focus on what is essential to portfolio performance: asset allocation. How to find the right allocation between equities and bonds, and how to properly diversify our global exposure? 90% of your stakes are here.
This is Yomoni’s approach. We use ETFs exclusively, but we work hard on ETF selection, distribution, and above all, adequacy with client profiles (investment duration, risk tolerance, market experience, etc.). A management mandate framework that requires minimal work from the client.
So, for example, it is not a problem to offer a very dangerous allowance to someone who may buy a primary home within two years. On the other hand, it should not be overly conservative over the long term, such as retirement. The main risk of this deadline is that inflation devalues capital if payments are too low.
Moreover, this is one of the persistent prejudices. If you think life insurance will no longer pay anything, it’s time to avoid the asset allocation problem altogether and consider investing in a fund in the euro.
Recipes useful for Yomoni customers
And does it work?
Pretty good ! Based on fund market research, Yomoni has confirmed that it outperforms 95% of diversified investments that offer comparable levels of risk. The latter primarily use non-ETF investment vehicles, are plagued by headwinds, and of course have a negative impact on performance, forcing more effort to achieve comparable results.
With the most risky profile and 2021 performance of + 22.7% (an exceptional year with a 5-year average of + 9.5%, even if it’s not embarrassing), Yomoni’s Profile 10 is an ideal solution for dynamic placement. The range of 10 profiles makes it possible to find solutions to all heritage needs in an easy-to-read and transparent way.
Fintech stands out for its wide range. This is because administrative obligations apply to the four major financial scopes available to savers: securities accounts, PEAs, annuity savings plans, and life insurance.
The ideal solution for investing your savings?
Customers seem to be convinced of this, with unpaid payments more than doubling in a year, a combination of all envelopes within range. And that’s probably not over.
Past performance does not indicate future performance. ETFs are financial products that are at risk of capital losses.
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