Life insurance is often presented as a safe and advantageous investment to prepare for the future. However, not all contracts are equal. Some of them have particularly disappointing returns that can harm your savings. In this article, discover the life insurance policies to absolutely avoid, to help you make informed choices for your financial future.
In an uncertain economic context, it is essential to choose your investments wisely. L'life insurance is usually seen as a refuge for savers, but not all contracts guarantee a good return. According to a recent ranking of the worst life insurance contracts, many investors could find themselves disappointed by placements which do not meet their expectations. We looked at these different contracts that should be avoided at all costs.
What are the worst life insurance policies on the market?
Life insurance from banking networks
Every year, many savers flock to their banque to take out life insurance, unaware that this option is not the most ideal, as demonstrated by the 2022 and 2023 rankings of Meilleurtaux Placement. Indeed, renowned banks which offer life insurance contracts often hold their customers captive at lower rates. prohibitive. Société Générale, for example, with its Séquoia contract, offers payment fees of up to 3% for management fees of 0.96%. The same levy is applied at Crédit Agricole with its Predissime 9 series 2 contract, for a management fee of 0.85%.
Life insurance from private banks
THE private banks offer their wealthy clients so-called high-end life insurance, a perfect excuse to take higher rates than traditional banks. In the top 3 of these banks, we have HSBC Private Bank, Neuflize OBC and Arkea Private Bank which respectively charge paymentup to 2.75%, 2.5% and 2% for respective management fees of 0.75%, 1% and 0.90%.
Life insurance from insurance companies
As pointed out finance-heros.frTHE insurance companies are not left out when it comes to offering their clients premium life insurance contracts. As an illustration, the companies Allianz, Predica and GACM charge 4.5%, 4% and 3.15% respectively. Let's take an example, if you pay €50,000 into life insurance with 4% of your payment, that's €2,000 which goes into costs! Life insurance is among the best investments in this year 2024, do not hesitate to seek assistance from a insurance broker to help you choose your contract.
The evaluation criteria taken into account for the classification of life insurance
The rate of return
Whatever life insurance contract you choose, there is no maximum amount to deposit on this type of investment. Therefore, the rate of return is one of the main criteria for judging life insurance. A low yield means that your life insurance policy is not lucrative enough. It is therefore crucial to compare the rates offered by different contracts before making your choice. In 2022, the average rate of return on life insurance contracts was 2%. In 2023, this rate rose to 3.7%. Today, we have reached a satisfactory average of 2.5%. Thus, a life insurance contract can be considered bad if the rate of return is less than or equal to 2% in 2024.
Associated costs
Fees can seriously impact the net return on your life insurance policy. Whether entry, management or exit fees. It is therefore important to read carefully the general conditions in order to avoid unpleasant surprises. As for the entrance feessome life insurance contracts do not charge any. Be aware that entry fees will be considered exorbitant if they are closer to 5%.
The reputation of the insurer
The financial strength and reputation of theinsurer also play a key role in choosing life insurance. A well-established and respected company will be more likely to honor its commitments in the long term. It is also wise to find out about the morality and ethics of agents, so as not to come across mischievous advisors. Make sure you choose the life insurance that will allow you to prepare well for your retirement.
