Life insurance : the decrease of fund performance in euros makes the insurers inventive

In his recent contract, Allianz offers a new way to invest on the market while limiting risk. Advantages and disadvantages.

The world of life insurance is undergoing a revolution without precedent since the creation of the fund in euros. The exceptional circumstances of low interest rates has melted the returns of the funds in euros and makes their future uncertain.

For several years, insurers and distributors are trying to find answers, and encourage their clients to turn to the units of accounts, such media without any guarantee for investing in the financial markets.

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But it is without counting on the resistance of the French, accustomed with the funds in euros to cumulate performance, security, and liquidity ! To this day, the investments in units of account reach painfully 20 % of the premiums paid.

To solve this problem with triple unknown, Allianz brings his stone to the edifice. The insurer is launching a new contract to be referred to as Allianz Active4Life, available from € 30 000. In this envelope, you will be able to invest and choose between two diversified fund called Allianz Strategy Select 50 and Allianz Strategy Select 75, with a profile, respectively balanced and dynamic.

Insurance against the risk of loss

The following is new : you can get protection on your savings. Customers who have selected the unit of account is the least risky are protected to the tune of 90 % of their savings, 85% for those who chose the dynamic support.

let's Take the first case. The mechanism is the following : to contract anniversary date (or date of death if applicable), the insurer looks at the performance of your savings net of fees. If it has progressed, so much the better for you ! If it has decreased by 10 % or less, the loss is fully reflected. On the other hand, in the event of a collapse of the markets and a drop in the value of your contract exceeds 10 %, the insurer compensates for the difference in the re-crediting of units of account. You will therefore, whatever happens, that 10 % loss at most.

so That is an insurer that... provides ! Because this mechanism is nothing other than a kind of insurance against the risk of loss. The problem is, that the peace of mind has a price ! Count, according to the current pricing, 1 % per annum, subject to revision at anniversary date of the contract.

This cost may fall if the circumstances are more favourable (rising rate) or increase, but is capped at 2 %. It is added to the classical pricing of the contract, which is not particularly cheap : up to 4.5 % fees on payments and 0.99 % annual management fee. It would have been welcome to make an effort on the latter to make the product really attractive !

rigidities

The protection is optional : each year, you have the option to keep it or remove it. However, this option is removed, the contract has little interest because you're very limited in terms of carriers : in addition to the two funds mentioned, there are two other products - a profile careful and a monetary fund - can you desensitize to the risk. Finally, in the case of a partial redemption, the proportion protected is reduced in proportion.

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The implementation of the guarantee also imposes some rigidities in the contract. Thus, you will not have the right blend of media. To mediate from one to the other (on the whole of the capital) it is necessary to wait for the contract anniversary date. Of course, nothing prevents to multiply the envelopes to add to the flexibility.