By paying premiums on the investment supports of your contract, you build capital to grow. You can then decide to benefit from it to your living beneficiaries or to pass it on to the people of your choice upon your death. Constituent elements of a life insurance contract , premium payments meet strictly controlled contractual, legal and tax conditions. So, what is a life insurance premium? Sicavonline helps you see things more clearly.
The insurance contract is a product that is not simple and can be difficult to understand. Life insurance contracts are long-term products; they must be taken out taking into account the objectives chosen and the holding period chosen.
How does a life insurance contract work?
Life insurance is a product with a dual purpose of savings and foresight, covering both insurance in the event of life and insurance in the event of death. Taking out life insurance , how does it work? Life insurance is a contract by which the insurer undertakes, by paying a premium or contribution, to repay the amount of savings achieved in capital or annuity:
The amount returned in the event of total redemption or death corresponds to the capital valued on the effective date of the operation. It depends on the sums you have paid in the form of premiums, increased by gains or possibly reduced by losses depending on the risks linked to the chosen investment vehicles. A fund in euros thus promises to secure your savings by generally providing for the amount of premiums deposited there, less the costs provided for in the contract. On unit-linked funds , on the other hand, the savings invested can fluctuate upwards or downwards following the evolution of their quotation on the financial markets, in return for prospects of higher returns in the long term, the investor bears the risk of capital loss alone.
Before selecting a support, it is important to consider your risk appetite, your family and financial situation as well as your objective and the duration of your investment.
Sicavonline also wishes to return to the risk of an investment in units of account, namely that the insurer only commits to the number of units of account, and not to their value, which can fluctuate upwards or downwards. decline depending on developments in the financial markets. The desire for a better return is accompanied by risk-taking; unit-linked supports present a risk of capital loss. The amounts invested in unit-linked supports are not guaranteed, they are subject to upward or downward fluctuations depending in particular on developments in the financial markets. Please note that past performance is no guarantee of future performance. In certain cases, the insurer may be unable to invest or disinvest in certain units of account. In accordance with regulations, it may therefore be necessary to temporarily suspend or prevent certain transactions on the contract.
What are the different types of life insurance premiums?
Depending on the insurers and the products they distribute, several premium payment options may be granted, with varying minimum amount requirements. Considering your long-term objectives, your savings capacity or the origin of the funds you wish to invest, you will direct your choice towards the contract offering the conditions best suited to your situation.
The initial premium
The subscription to any life insurance contract, whatever it may be, is subject to the deposit of a first payment annexed to the membership application. The amount of this initial premium cannot be less than a value fixed in the contractual provisions, which can vary from a few tens to a few hundred euros, or even up to several thousand euros in the particular case of a premium contract. unique.
It is up to you to choose the distribution of this first premium between the different supports offered by the insurer. It should be noted that most life insurance contracts now require a minimum investment fixed as a percentage on unit-linked supports.
The prime unique
In a single premium contract, which is little used today, the initial premium presented at subscription cannot be supplemented by any other additional payment. This type of life insurance, intended to invest a large sum (from for example an inheritance, a donation, a real estate sale, etc.), is only of interest if its lack of flexibility is compensated in particular by a higher return or lower fees.
