Arbitrate your life insurance funds: instructions for use

Before addressing the specific question of arbitration, let us recall that a life insurance contract can be taken out in various forms. Savers who do not wish to take any risk turn to a fund in euros. This type of contract is similar to a bank savings account since the funds paid are guaranteed. Clearly, the contract holder cannot suffer any losses and the sums invested will be valued in euros according to the applicable rate of return. Savers who want to boost their savings and try to better remunerate their investment at the risk of incurring losses tend to opt for unit-linked contracts. The funds here are not valued in euros, but take the form of shares or bonds in particular. These, depending on the evolution of the financial markets, can increase or decrease in value. Faced with the threat of losing part of their investment, many choose a multi-support contract including both investments in euro funds and investments in units of account. Diversify your media naturally limits the risks. But let’s come back to the question of arbitration. It is a question of arbitrating its own placements between the various supports. In concrete terms, the saver can decide to redistribute his euro funds towards units of account and vice versa or between units of account.

Automatic life insurance arbitration for serene management

Among the advantages of life insurance is a certain flexibility in the management of one’s assets. Also, it is possible to opt for automated arbitration and/or one-off arbitrations. Automatic life insurance arbitrage is all about setting goals. To fully understand, let’s take a few concrete cases. A saver wants to secure his capital gains automatically. If its unit-linked investment reaches 4%, for example, the gains made are transferred directly to the fund in euros. One can also imagine that a saver wishes to optimize profitability by placing all the interest on his fund in euros on a fund that offers better prospects in terms of return. It is also possible to define a distribution between units of account and euro funds. If the investor wishes to keep 90% of these funds in euros, a regular rebalancing can take place in order to preserve this proportion despite changes in the various media.

Free life insurance arbitrage for dynamic management

The holder of a life insurance contract may at any time ask the financial institution to transfer part or all of his savings to another fund. As we have mentioned, he can choose to move his units of account to a secure fund or, on the contrary, his euro fund to more profitable but riskier investments. He can also redirect his units of account towards an investment he deems more favourable. This free management of life insurance is appreciated by savers who follow the stock and property markets. On the other hand, those who are not knowledgeable in the matter or do not have the time to follow the evolution of the markets and the news risk not making the right choices and not stimulating their investments, or even to lose part of their savings. Those who still opt for this mode of management will also have to determine the right moment to carry out their arbitration. Arbitrage must first be carefully considered when subscribing to adopt the most suitable strategy. Then, it is customary for some to take stock at the end of the financial year for an annual arbitration and to readjust the distribution between the funds, leaving those which seem to be falling inexorably in favor of those which are showing encouraging signs. Everything will also depend on the capital invested and the desires of the insured. The larger the sums, the more he will tend to arbitrate his funds regularly.

Life Insurance Arbitration Procedure, Fees and Time Limits

There are several ways to arbitrate. The request can be made directly at the counter or during an appointment with your bank advisor, by telephone, email or post. However, it will be essential to provide a signed document specifying the request. And, today, this management is facilitated thanks to the possibility of formulating this request directly on the personal space of the website of the establishment. Processing times vary according to insurers and may, especially for physical establishments, require several days. Thus, the price may change between the time the request is made and the time the funds are actually placed. As for the arbitration costs, not being supervised, they must be the subject of particular attention. Depending on the contracts, they will be of various kinds. Some institutions provide free annual arbitration and others, on the Internet, offer total free without limitation. But generally, either a rate of less than 1% of the amount transferred is applied, or a lump sum is included on each transfer. If in doubt, you should check the cost of arbitration on your contract.

(By the editorial staff of the hREF agency)

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