Life insurance: profitable alternatives

Coordinator Loic Grasset


The best endowed multi-support life insurance contracts include a wide range of financial products offering returns close to or above inflation, without stock market fluctuations. The counterpart: most of the time giving up the complete protection of your savings.

Unlisted: investing differently in companies

Double-digit annualized returns that are fairly stable over the long term, without the day-to-day jolts of the equity markets: the performance of investment funds in non-listed companies and infrastructure is attractive. “95% of the world’s finest companies are not listed, it would be a shame to deprive yourself of private equity within a diversified allocation”, remarks Bertrand Tourmente, founder of Althos Patrimoine. Problem: most media involve accepting a blocking of the sums invested for years and the fees are often high. “Luxembourg life insurance provides access to this type of strategy at reasonable costs,” emphasizes Bertrand Tourmente. There are so-called “evergreen” solutions, liquid within a few months and offering immediate profitability, whereas the capital entrusted to most funds is not permanently at work, resulting in a reduced return to the investor. Their distribution is however confidential.

Real estate: the advantages of paper stone

Investments providing protection against inflation are not legion. Real estate is one of them, all the more so when the investment, made within life insurance, makes it possible to escape the prohibitive taxation of property income. Different real estate products coexist. The purest are real estate investment companies (SCPI) and real estate companies (SCI). “Net of contract costs, their profitability is between 3.5 and 4.5%,” observes Patrick Le Maire. SCPIs are performance products providing monthly or quarterly income. “It is a source of complexity because this income must be reallocated: if it is not reinvested, it is paid by default into the fund in euros”, remarks Guillaume Arnaud, chairman of the management board of Sofidy. Private companies behave like traditional funds: their value tends to appreciate over time and subscription costs are lower. Guillaume Arnaud recommends favoring “diversified products, with a large number of assets, spread over different types of tenants and geographically”. To capture performance “twice as profitable”, Bertrand Tourmente recommends taking an interest in real estate private equity. “Funds buy very well placed buildings whose use has expired, at a discount. Restructured and then rented out on a fixed lease for nine or twelve years, these properties are resold at the peak of their value,” he points out.

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Eurocroissance: for the most cautious

Halfway between the fund in euros, with guaranteed capital, and financial supports in units of account (UA), where the risk is assumed by the holder of the contract, the eurocroissance fund was born in 2014 from the desire to bring out a third way for life insurance. The concept, proposed by a handful of companies, is based on the abandonment of the capital guarantee at all times, which limits the performance of funds in euros. But, in return for a guarantee at a maturity fixed at the policyholder’s choice between eight and forty years, between 80 and 100%, the insurer’s objective is “to offer additional performance to the policyholder, thanks to an increased diversification of its investments”, explains Patrick Le Maire, director of development at Unep. The association of savers, which works with Prepar-Vie (Bred group), is aiming for a return “1.50% higher than the average for euro funds on the market” and a relative regularity of performance.

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Also read. Life insurance: the parameters to decide

Structured products: participating in bull markets

If the operation of structured products is sometimes complex, the promise is simple, hence their success. “A structured product allows you to benefit from part of the rise in a stock market index or a basket of shares, with partial or total protection of the capital, as long as the valuation of the index or the basket remains within a predefined range”, summarizes Fabien Labasse, director of savings at BNP Paribas. In other words, the underwriter agrees not to fully understand the performance of the equity markets, while avoiding downturns to a certain extent. Most often, the subscriber receives an annual remuneration called a coupon and can benefit from early repayment on a date of recognition provided for in advance.

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