Life insurance: what is it?
Life insurance is a contract by which the insurer undertakes to pay a pension or capital to a person, the purchaser, for a premium. This payment is made depending on the type of contract they have signed. In fact, in a life insurance contract, it is necessary to distinguish between two kinds of contracts: a contract of insurance in case of death and a contract of insurance in the event of a life
- Insurance in the event of the life: The insured recovers its capital at maturity of the contract, as well as all of its interests. In this type of contract, the insured may be the beneficiary.
- The insurance in case of death: In the event of death before the end of the contract, the principal is passed on to the beneficiaries outlined in the subscription.
The life insurance contract can be done by a bank or an insurance company. It allows you to train or develop capital.
What life insurance to choose?
No long-term commitment is not free of risk, it is necessary, therefore, to expect surprises when you purchase a life insurance policy. It must, therefore, be well-informed and careful before making a decision. The first measure to adopt is to accurately define its risk profile: who we are and what we want. This allows you to avoid many mistakes in referral, the investor should also consider other criteria and techniques to make its decision (type of contract, the number of costs, options, management, etc)
In all, before you select a contract, here are the points that must be considered :
Profile of the investor:
It is necessary to determine hers before investing his capital. Taking the decision to purchase life insurance is not enough to define a risk profile. The attitude more or less daring, the financial knowledge and computer of the investor, the amounts to invest, his or her family situation, his age, and the objectives are the criteria to take into account to know precisely what his / her profile is. Once it is well established, the subscriber will finally be able to know the degree of risk he is ready to undertake with his investments.
Duration of placement:
One of the questions that must pose to an insured prior to placing their money, is the length of the commitment that he will have to take, it must be determined as a function of its visions and aims: a few months, two to three years, more than 10 years? In effect, life insurance turns out to be advantageous in the long term. In Morocco, the life insurance contracts, the duration of which is at least equal to 10 years, enjoy a total exemption of the IGR, in the same way as the supplementary pension schemes such as the CIMR.
Life insurance :
the possibility of payments and withdrawals: one of The main rules to check before signing a contract is its versatility and flexibility of operation that is to say the ability to deposit or withdraw money freely. In general, withdrawals (or redemptions), partial or total, are possible at any time, with a tax on the products based on the duration of the contract.
The level of costs of life insurance :
insurers do not work for anything, every offer is an opportunity to collect a fee. This is completely normal, but do not exaggerate. The subscriber has a vested interest to compare the costs specified in the contract being offered to those currently charged by the competition. We distinguish between two types of costs :
- The first is the acquisition costs, which will in general go up to 3%, according to the prices observed on the market. This charge is levied directly on each contribution paid by the customer, whether regular or exceptional. In clear words, when the customer pays 100 DH on his contract, this is actually 97 DH that is actually capitalized.
- Then comes the management fee. They vary slightly from one company to the other. Usually, the rate is around 0.05% Of the rest, these fees are collected at the end of each year after revaluation.
Rate of interest:
It is necessary to be extremely vigilant before you sign the contract, especially when it offers the subscriber rates of interest very attractive, it is necessary to pay attention to these numbers are usually designed to lure new customers, they are only guaranteed for a short period of time. However, the rate reverts to the one applicable to older clients.
A good advisor will be able to enjoy its purchaser of real savings further. It must enjoy the support of the experts, especially for these situations decisive. The ability to manage line is also a very important asset for life insurance, it is advisable to opt for a contract that offers the possibility to manage and make its operations online for free: payments, redemptions, trade-offs… everything must be done in a few clicks, rather than depend on the presence of an advisor and losing precious time. That said, in case of need, the broker must be available by phone and mail.
Buy more life insurance contracts at the time :
Each investor can open as many contracts of life insurance that he wants, so why not take advantage of it? It is a trick suggested by the experts that can take advantage of two options to tax exemption at the time. To do this, it is recommended to take out several contracts with a small capital. The idea is that the capital sum in each contract will be maintained below the exemption threshold of the IR, which allows the investor to escape. If on the life of the contract, the investor has opted for the deduction of premiums from their taxable salary, it passes between the meshes of the fisc.