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life insurance is overvalued by tax incentives, risks, low returns and high costs.

Posted by herskovits at 2020-02-22

In recent years, we have been uncomfortable with life insurance issues. More specifically, from 2010 or 2011, we start to remind you of the real risk of Euro funds rising interest rates.

Life insurance is a euro fund, that is to say, the risk is gradually exposed and the income is low.

At that time, our speech was shy and uncertain, because it was a new and explosive topic, so there was no need to conduct improper anxiety analysis. However, eight years later, when I read these articles, I absolutely had nothing to change, but all things had happened... However, although these articles were decreasing. Earnings, those savers who stay on life insurance contracts in Euro funds lose nothing, and even their quiet capital is boosted without the pressure of securities market news.

Copy this website code to your website to set up a ballot box on your website. "... In this 2012 article, you can read everything everyone found in 2019! Life insurance is under threat!

At the same time, we wrote this article: "Life Insurance: Euro fund is a wrong investment, but you don't have many other options." Those who do not accept risk must be content with the low returns of Euro funds, which is a minor injury.

The risk and low income of future income of life insurance contract is an important problem, no one knows the answer! No one... It's a problem! Let's scare ourselves, shall we? Or we will be right in the end, and regret that our analysis is not more certain. I don't know. I can't imagine the worst, but I can't make up my mind not to imagine the disaster.

In any case, the future earnings of the euro fund will be declared low in the long run! The euro fund is no longer an investment that adds value to its assets. At the very least, it guarantees (or at least hopes to) the absolute value of the capital purchased, even if relative poverty is concerned with less than the benefits of inflation and nominal economic growth.

Life insurance is also an accounting unit whose costs are too high to produce satisfactory returns.

Those who are disappointed in the return of the euro fund will always succumb to the commitment of the account unit and the return over the cost of risk. In a world where there is no safe return, if there is no return, the risk will not become more adverse.

As we have explained in this article: "relax: the certainty that risk-taking doesn't pay off! Only adventure can bring profit! "... risk alone is not enough to achieve high returns; the right risks must be taken to avoid bad ones. For example, the downside risk is that following the business advice of a life insurance company encourages you to abandon the euro fund and invest in financial markets or in a portfolio of securities with a peak value. Like trees flying into the sky

In addition, in your life insurance contract to invest in a unit, is the cumulative management costs! Between the management fees of life insurance contracts (average 0.75% to 1%), the management fees of account units (1% to 2%), and the total annual management fees of 2% to 3% will have a negative impact on your savings income. ("Life Insurance: due to 2.96% of the management fee, the investment in the account unit is seldom profitable.")

And notice the false revolution of ETF, which is the most common one sold at the same high cost in a management mandate (cancel fees... To recreate other fees...............................................................

But savers stick to their life insurance contracts to get hypothetical tax benefits!

However, in spite of these serious defects, which make life insurance an unattractive investment, savers still save a lot to get the tax preference that they can't make full use of.

Since the introduction of parity tax, life insurance no longer has a decisive tax advantage in the aspect of repurchase income tax.

The real interest of life insurance lies in the inheritance of heritage, whether from the perspective of civil or tax. In this regard, life insurance is an incredible financial and civil advantage, for those who need life insurance, who will use it. "Life insurance" is a magic tool to optimize the delivery of heritage, as we explained in detail in our books "Heritage Inheritance" and "life insurance and Heritage Management", but still needs:

Finally, a large number of savers link their life insurance contracts, although the benefits are low, the risks are high, and the costs are high, in order to get the tax benefits they don't need, or they don't use them in the best way.

Life insurance is a popular financial product, although only an important legacy or complex family situation has a significant interest in avoiding life insurance.

To be continued

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