Comparator expenses life insurance: avoid the pitfalls!
Going through a comparator fresh life insurance has become more and more essential in a period when yields are going down. In fact, whether it is the investments that are more or less dependent on the stock market (which has stagnated for the last 3 years) or the risk-free vehicles that have fallen sharply, the proportion of life insurance costs has blow exploded.
Indeed, as banks have not moved their rate of fees and returns have decreased, it may happen that these financial expenses come “eat” up to 30% to 40% of gross returns. This is the reason why using a comparator of life insurance fees is more and more important. Our comparative life insurance system goes further by offering a ranking of financial vehicles based on a net management fee history.
Comparative life insurance charges: what are we talking about?
When you subscribe to a life insurance, it must be remembered that the financial institution that offers it will be paid through different types of fees:
- management fees: applied by all organizations for all types of life insurance and applied annually to the total amount invested.
- opening fees: fees applied on the first payment made at the opening, usually made by traditional organizations.
- on-payment fees: fees applied each time money is paid, usually charged by traditional organizations.
- arbitration fees: charges applied on multi-support life insurance when it is decided to withdraw the money from one support and reinvest it on another.
- brokerage fees: fees applied to the actual performance of life insurance. This type of fee that pays the broker is dedicated to larger contracts.
Offering a comparative life insurance fee should at least take into account these different costs. At Capitaine Epargne, we made it quite simple, we excluded all insurers and banks that charge opening fees or payment. Indeed, this practice is part of the past and was supposed to remunerate an operational management of receipts but now that everything is computerized, it is no longer a question of applying them.
To be part of our life insurance comparator, financial organizations must exclude these practices.
We have chosen to separate our comparator of life insurance costs between euro life insurance (risk-free) and multi-asset life insurance. Indeed, rates and practices are quite different.