Unit-linked life insurance, potential for return and diversification

Investment instruments in securities, units of account in life insurance contracts are on the rise. The variety of assets they allow to invest in is a good addition to Eurofunds, whose performance has been limited for several years by low bond interest rates.

The family of life insurance contracts (https://placement.sicavonline.fr/assurance-vie/) has two main subfamilies of investment instruments: funds in euros on the one hand and units of account (UA )* on the other. The first ones, which are a French feature, have the feature of guaranteeing the capital invested by the investors.

The euro funds, which consist mainly of government bonds, constitute a “safe pocket” of life insurance contracts, but their returns are limited by low bond interest rates: in 2021, according to France Assureurs, the average effectiveness of this support in life insurance contracts remained limited at 1.3%, stable compared to 2020.

In this context, units of account are of increasing interest to investors: these investments are more risky because their capital is not guaranteed, but also potentially more profitable due to their long-term performance and a wide variety of underlying assets in which to invest. invest.

What are units of account?

Specifically, units of account (UC) are investment instruments denominated in units or shares of transferable securities available through life insurance, usually in so-called “multi-support” contracts, which provide access to both euro funds and units . accounts. Investors are free to allocate their capital between the EUR fund and UC as they see fit and may invest in one or more UCs. The capital of each of these carriers is expressed in the number of shares, not in euros.

The insurer assumes obligations only in terms of the number of accounting units, and not in terms of their value, which may fluctuate up or down depending on the development of financial markets. Only the subscriber/member bears the risk of capital loss.

Wide range of investment instruments

Unit-linked units have the dual benefit of allowing you to diversify your savings by investing in different types of transferable securities (listed or unlisted stocks, bonds and other debt securities, investment properties, etc.) life insurance tax (taxation does not apply until redemption is made, and taxation is lower after eight years of ownership).

Several forms of units of account are available to life insurance policyholders:

  • UCITSTransferable Securities Collective Investment Liabilities refers to portfolios of securities (stocks, bonds, mutual funds, etc.) that are jointly owned by several contributors.
  • SIKAV (investment companies with variable capital) and FKP (Fonds Communs de Placement) are UCITS categories. The former manage a collective portfolio of transferable securities on behalf of shareholders, the latter are co-owners of transferable securities issuing shares;
  • OPKI*Real estate collective investment enterprises allow investment in a majority of real estate assets and a minority of transferable securities (stocks, including stocks of listed real estate companies, bonds or cash UCIs);
  • SCPI*Real estate investment companies have as their sole purpose the acquisition of rental property;
  • bright names means shares or bonds issued by a company listed on financial markets;
  • EMTNmedium-term Eurobonds are complex debt securities, the yield of which depends on the underlying asset (index, stock, fund, etc.).
  • I FExchange Traded Funds or trackers, Euronext’s regulated market securities, are aimed at replicating index movements, both up and down.

* The choice of real estate support may present limitations, whether in terms of liquidity: for example, the possibility of arbitrage may be limited during the first 3 years from the date of investment in SCPI type support, and also in terms of costs: additional costs may be provided by the insurer for investment into these real estate supports. Also, you should take the time to read the documents provided to you by the insurer before making your choice.

A wide variety of units of account that offer widely varying risk and return ratios from one vehicle to another, thus providing investment opportunities compatible with all investor profiles, whether cautious, moderate or risky.

Before choosing a vehicle, it is important to consider your risk appetite, your family and financial situation, and the planned duration of your investment.

Reading the KIID or Key Investor Information Document may inform you, inter alia, of investment objectives and policies, risk and return profile, fees and past performance, which are not indicative of future results. Take the time to read it carefully before investing in any media.

COMPOSIS: over 700 units of account (UA) available

However, not all life insurance contracts necessarily provide access to a wide range of unit-related products. The number of CUs offered by some distributors is even sometimes limited to a small handful of supports, which, in addition to the weakness of the opportunities presented, turns out to be a source of additional risk: in the absence of a choice, the holders of these contracts may be tempted to allocate their default capital to units of account that do not match. or poorly fit their profile.

Therefore, it is recommended to turn to life insurance solutions that offer a comprehensive enough offer to find vehicles that best suit risk appetite and provide sufficient savings diversification, which is a rule of thumb for successful gold investing.

This is the case of COMPOSIS, the new life insurance policy from Sicavonline. Its offering includes a EUR fund and over 700 related media: over 500 UCITS, over 40 ETF trackers, over 20 real estate media (SCPI, civil companies, OPCI), over 130 securities and two media. in investment capital. This digital à la carte contract (subscription, payment and arbitrage) allows you to receive online advice thanks to an algorithm that allows you to define the management method, financial distribution and contract options tailored to each contributor profile. 100% modular, COMPOS is available in free management and delegated management.

*Risk of investing in a support in units of account:

The desire for higher returns is accompanied by the acceptance of risk, associated with the unit of support represents the risk of capital loss. The amounts invested in units of account are not guaranteed and may fluctuate up or down depending in particular on the evolution of financial markets. We remind you that past results do not predetermine future results. In some cases, an insurer may not be able to invest or disinvest certain units of account. Therefore, the rules may require you to temporarily suspend or restrict certain operations under the contract.

KOMPOZ is a collective life insurance policy insured by Ageas France and marketed by Sicavonline as an insurance broker. The signatory of the COMPOSIS agreement is the association Personaliz Epargne Digitale, become a member of the association and join the COMPOSIS agreement.

Ageas France
Limited Liability Life Insurance Company. A company governed by an Insurance Code approved by the Prudential Supervisory Authority with a capital of EUR 159,221,273.61. Registered in the Commercial Register of Nanterre under the number 352 191 167, registered office: Village 5 – 50 place de L’Ellipse – CS 30024 – 92985 Paris La Défense Cedex. FATCA identification number: GIIN 6841 D2.00009.ME.250

SICAVONLINE, Société Anonyme with a capital of 4,000,008 euros. RCS Nanterre 423 973 494.

Head office: Village 5 – 50 place de l’Ellipse, CS 50053, 92985 PARIS LA DÉFENSE CEDEX. Such. : 01 70 08 08 08.

An investment service provider approved by the Prudential Control and Dispute Resolution Authority under number 19 253 CE.

An insurance brokerage company and intermediary in banking and payment services, registered with ORIAS under number 18001256.

The editors of Boursier.com did not take part in the production of this content.