Life insurance: how to invest in the current context?


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Our economic environment has changed radically in just a few months. In this context, savers must find new benchmarks to make the right investment choices. Life insurance remains a savings solution that offers many possibilities, but what are the right reflexes to adopt?

After years of low interest rates, the economic environment has radically changed in just a few months. In one year, 12-month inflation rose from 2.2% to 5.6% (1), the 10-year French government borrowing rate from 0% to 2.80%, the CAC 40 from 6,700 points to 6,250 points, the Livret A rate from 0.50% to 2.00% . In this context, savers must find new benchmarks to make the right investment choices. Life insurance remains a savings solution that offers many possibilities, but what are the right reflexes to adopt?

It is more than ever necessary to diversify your savings

Life insurance funds in euros make it possible to guarantee the capital and the interest produced is definitively acquired, but these funds only yielded 1.28% on average in 2021 (2). For the 2022 rates, the experts expect a slight rise, but in the best of cases, the average rate of return should not exceed that of the Livret A (before taxation).

To hope for a better return, it is more than ever necessary to diversify your savings by turning to the many units of account available on life insurance contracts, investment vehicles with higher potential returns than that of a funds in euros, but for which the capital is not guaranteed. Many savers have already adopted this strategy since unit-linked accounts represented 41% of life insurance inflows last July(3)compared to only 15% 10 years ago.

However, it is not always easy to choose the units of account on which to invest. This is why life insurance contracts offer turnkey solutions such as managed management or profiled management. The insurer distributes the savings between different vehicles, taking into account the saver’s risk appetite: the part to be boosted will be placed on a selection of units of account and the part to be secured on the fund in euros.

Read also: Life insurance: what assessment 3 years after the entry into force of the Pacte law?

Save regularly and over the medium term

Stock markets may experience more or less significant variations. Also, it is necessary to keep in mind two main basic principles before investing. First of all, you have to have the reflex to save regularly either by making additional payments or by scheduling monthly payments on your contract. Indeed, saving regularly makes it possible to enter the financial markets at different times and at different prices and thus to smooth out the variations. Then, it is important to clearly define your investment horizon and stay the course.

Choose investment vehicles adapted to the context

Finally, savers who are seasoned or accompanied by an adviser will be able to choose investment vehicles themselves. Real estate supports (SCPI in particular) are particularly suited to the current inflationary context because rents are indexed to inflation. Bond funds provide respectable performance with moderate risk-taking, provided that too high a share of “high yield” bonds (ie presenting a high risk of default) is avoided. Equities are to be favored on the condition of choosing “pricing power” companies, that is to say companies capable of withstanding the rise in the cost of raw materials.


(1) Source INSEE
(2) Source ACPR
(3) Source France Insurers

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