Life insurance: these management fees that lower the real yield of units of account – August 2022 – News – Life insurance

Entry fees, arbitration fees, payment fees… the list of life insurance contract fees is long and savers often get confused. According to the latest analysis from Good Value For Money, unit-linked (UA) fees average between 0.60% and 1.10% per year in 2022.

According to the 2022 study by the firm Good Value for Money (GVfM), published at the beginning of August, unit-linked (UA) fees range between 0.60% and 1.10% per year on average. Behind this figure, the costs are numerous and in reality few holders of a life insurance contract manage to understand the details.

Also, if unit-linked life insurance often shows better returns than euro funds, it also poses a greater risk loss of money. However, in some cases, savers may be surprised to see their capital melt away even though their unit-linked investment is showing a positive return.

What are unit-linked fees?

The list of costs generated by unit-linked life insurance is long and you should know that management fees are applied to each unit. According to the insurers, the latter vary according to the management methods (active or passive), the asset class (stocks, bonds, etc.) and several other factors.

The so-called current costs include: the remuneration of the asset manager for the management of the financial supports, the retrocessions returned (in favor of the distributors of the contract), any commissions for financial “outperformance”, as well as the margin of the management company .

To note that these fees are “hidden” for savers, since CPU performance encompasses them.

Higher costs for SCPI-type CPUs

On the other hand, the insurer is entitled to apply additional costs concerning specific CPUs: SCPI, trackers or live titles. GVfM recalls that these costs “may vary depending on the nature of the supports, in particular on real estate supports of the SCPI type for which they are significantly higher”.

“The fixed costs levied by the asset manager are indicated in the legal documents (DICI) of each medium. But in reality, the fees actually charged, i.e. the ongoing fees, are almost always higher than the fixed fees because of the transaction fees on the one hand, as well as the so-called outperformance fees”, specifies the firm in its report.

Finding the details of this information is now easier. Since June 1, insurers have the obligation to display on their website a standardized summary table of fees annual and one-off charges levied on life insurance contracts. Since July 1, the total fees borne by each unit of account or each asset are also displayed. This will help you better compare the fees charged by different insurers.

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