most financial institutions offer a life insurance dedicated to substantial assets. Bait marketing or real advantage for the investor ? The tour of the question.
Welcome in the hushed world of wealth management. Big estate sale of the company, a real estate property, very high-income… many situations for which the financial institutions you will be rolling up the red carpet. With the key, very often, the underwriting of a life insurance policy to put your cold hard cash. And not just any ! This will be a contract called “high-end”, accessible with a first payment of around 100 000 euros minimum.
The promise of this offer ? Give you more than a product aimed at the general public, both on the euro funds, and other financial vehicles, whether on board, the level of costs or service. Is this a marketing well-oiled ? Without doubt, managers at the helm of the contracts heritage, namely the life insurance companies, are the same as those who market the offer public.
But what are really these products ? A review to carry out carefully, all the more that it is to invest significant capital. Only a contract of good quality will bring you satisfaction over the long term. We have analysed offers in the market in terms of the five criteria referred to above, with a focus on ten contracts traded by large signs (see table in article). Result : a verdict mi-figue mi-raisin.
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1 – The euro funds
It is the heart of any life insurance contract. Reminder : this type of fund guarantees the capital invested at any moment – net of fees on payments, but gross of management fees on some contracts – and is perfectly liquid. His performance is in decline for the past ten years, including contracts for the top of the range. But they are faring a little better. According to the Barometer 2017 savings life published by the firm Facts & Figures, the performance of the fund in euros was average at 1.67 % in savings standard, up 1.96 % and mutual fund assets, 2.00% in savings from private management”.
Balance : banks and traditional insurers pay most out of the funds in euros of the contracts top of the range, 30 to 40 cents more than for those intended for the general public. Each and every year. Attention, the choice is often limited to a single fund in euros and it is increasingly difficult to be able to put 100 % of his bet for high amounts.
Our view : the best funds in euros are also, in contracts accessible with a few hundreds of euros. You will find on the Internet, but also with each other (MASCF, MIF, etc) and associations of investors (Afer, Asac, Gaipare).
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2 – The financial offer
“A financial offer broad and a set of services to support the management of the capital,” proclaims the website of the Company General about his high-end segment. The table is the same everywhere. The financial offer ? Multi-management fund, stars, or niche, stone paper, title, live, trackers, non-listed, the list of available products is long. But this plurality is variable geometry. Some contracts are poor in real estate investment trusts (REITS) or shares in direct line, for example.
Other means, if some skins make use of large signatures of the management (Carmignac, Rothschild & Cie, etc), the bulk of the range that is offered is often based on the “house” funds. Good to know : the cells of private management giving more and more access to contracts in luxembourg, and for very large amounts to fund “dedicated” (custom).
What is it “aid to the management of the capital” ? Options automated mess, and as a culmination, the mandate of management (or arbitration) according to your risk profile. Again, while some insurers cut finely their mandate, others remain more coarse in the presentation. Especially, the flexibility will be at the rendez-vous ? Rare are products that allow, for example, to manage under a mandate only a part of the capital and drive the rest freely.
Balance : a net benefit to the contracts top of the range in respect to the supply public at large, including banks. Equal game, however, with the contracts of the advisors wealth management independent brokers or online.
Our view : more than the amount of funds, what matters is their diversity and most importantly, the ability of the advisor to guide you once the contract is signed. For investors autonomous, the online offerings are more interesting.
3 – The board
“A contract top of the range is first and foremost a service offering, analysis Corinne Calendini, director of the private management at Axa France. We are here to accompany the heritage of the client and respond to its problems, the council is our added value first. The content of the product, its performance, its openness to financial markets, which are of course important points, then come up.” Which act : the council first of all, the contract then.
For issues sometimes complicated – how much to sell his business, managing a move abroad, to better prepare for a big estate in a blended family… – cells patrimonial of the financial institutions will provide you with competent support and reassuring. But the council is not limited to this.
Will you have the choice between several life insurance ? It is far from’be systematic. And once the contract is subscribed, what management arrangements you guarantee it ? Return to the previous point and to the quality of the financial offer.
Balance : the board and management-legal and tax in the upstream of the subscription are clearly the strong asset of the offer top of the range. A key point to the customer’s property. For financial advice, the advantage is much less obvious.
Our view : this is the royal road for complex situations. But this is not the only one. A wealth management advisors an independent senior will also be able to bring your boat to port with, in fine, the underwriting of life insurance, quality consumer.
4 – fees
For investors wealthy, the cost issue may seem secondary. Error, paid-in capital and its valuation may be encumbered by an excess of expenses. Those levied on the remittances of a hand, with puncture rate contract up to 5 % (less in reality).
And especially those that affect the capital managed each year. Contracts top of the range fish and nearly 1 % per year on the units of account. Attention, the management fees applied to the fund, in euros, are, them, into perspective, both the attribution of the returns on this support is largely disconnected from this alone. On the management mandates, very widespread on the top of the range, beware of the bill : the fee is to be increased from 0.20 to 1.00% per annum depending on the amount concerned !
Balance : the position tariff of the contracts top of the range is not flattering : we pay dear enough his “Ferrari”.
Our view : negotiate the fee on the payments to less than 2 %, otherwise run away ! For the rest, compare with contracts offered on the Internet to see if the additional cost is acceptable.
5 – after-sales service
Few are financial institutions who focus on their after-sales service (SAV) at the time of the subscription of a life insurance policy. Wrong. Ask your interlocutor about the time of the execution of an arbitration or a withdrawal, on the faculties of management on the Internet, or smartphone, on the date of the amount retained for payments to be made, etc., The evolution of your product over time is another important aspect of the SERVICE. The legal nature of the contract – individual or collective – is also a criterion to be taken into consideration.
“The client appears better protected with a life insurance policy individual, it is not modifiable without his / her consent, judge Olivier Nigen director of Arkéa Banque Privée. In addition, the individual contract is of real flexibility : the insurer may evolve very quickly, for example by adding an investment fund at the request of the client. What have contracts that are really custom-made !” The character of “individual” contracts, as specified in the notice of contract, for a little over half of the offers top of the range. In contrast, the quasi-totality of products intended for the general public are kind of “collective”, therefore modifiable without the consent of the insured.
Balance : the quality of the SERVICE is assessed on a case-by-case basis, therefore caution. An individual contract will be more protective over the long term, which is especially important for large investments.
Our view : the key to a good after-sale service lies in the implementation of management tools simple and efficient. You must always have access to your contract and be able to act, especially if your advisor fails. On this plan, some insurers (Spirica, Swiss Life) or mutual insurance companies (Macif) have a train ahead.
Read our complete file
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