Savers and investors do not always have to go to their banks for savings or investment products. There are also insurers in the shop window.
“Life insurance is widespread,” says lawyer Nathalie Labeeuw (Cazimir). ‘Almost everyone I know has a life insurance policy in portfolio. But often they are not aware of this themselves. They have an investment portfolio that they do not know is packed in a life insurance policy. “
Insurance For The Purpose Of Savings
For investors with a lot of patience
Savings insurance has long been one of the most popular savings products. But due to years of low-interest rates, very few are opting for this type of savings. The guaranteed interest varies from 1 to even 0 percent. In the latter case, the saver is already entirely dependent on the possible participation in profit. ‘The insurers do advertise an interest rate, but after deducting the costs there is hardly anything left for the saver. There is not even compensation for the loss of purchasing power due to inflation,” says Andreas Vets van Stremersch, Van Broekhoven, and Partners. After all, savers also have to take into account the entry costs with every new deposit, which with some insurers can go up to 3.5 percent.
“At the moment, savings insurance is primarily a tax vehicle that allows savers to escape 30 percent withholding tax,” says Vets. It is possible to escape this if the policy has a term of more than eight years and the capital is actually paid out more than eight years after the policy was taken out. Nor is a 30 percent withholding tax payable if the policyholder is the only insured person and beneficiary and the policy also provides for a death capital of at least 130 percent of the total amount of the premiums paid.
Savers should therefore only invest capital in a savings insurance policy that they can miss for at least eight years. ‘It is quite paradoxical: savings insurance is aimed at the small, cautious investor, while the latter must immediately keep in mind an investment horizon of eight years. We tend to associate such a long investment horizon with more risky investments, “says Vets.
For those who want more return (and can handle more risk)
Because the yields of savings insurance are so low, the insurers are increasingly pushing their customers towards branch 23 investment insurance policies. These are actually investment funds with an insurance sauce over it. The potential return is higher, but the same applies to the risks. ‘They are insurance contracts whose value evolves with the chosen fund. Extra insurance costs will be charged. So those costs add up quickly for the investor. ”
Because in addition to the entry costs, which, just like with the savings insurance, vary from 1 to 3 percent, management costs are charged. On the other hand, there is something in return: no withholding tax and no stock exchange tax are payable on the sale. Yet Vets is a cool lover of investment insurance: ‘You better opt for the similar underlying investment fund at the bank. You then put the costs in your own pocket and not in those of the insurer. ”
There are various types of insurance that can yield profit in the future with the exemption of burial insurance even if it’s among the best burial insurance for seniors which had been designed to cover expenses at the onset of death and may benefit relatives and loved ones more than the insurer.