these 7 key details to check on your annual statement

By the end of March, you will receive your annual life insurance statement. A document where a lot of information may seem fuzzy or difficult to decipher. Here are the points to scrutinize.

Do you have a life insurance contract? The beginning of the year heralds the receipt, already effective or imminent, of the annual life insurance statement. Perhaps you threw it away mechanically? Error!

This statement brings you valuable information on your contract. Knowing how much your investments have brought you is obviously important, knowing the inherent costs of your operations is just as important. So how to read this statement and what else should you dwell on?

1 – The return of the fund in euros

On your annual life insurance statement, you will first find the basic information: who manages the contract and your date of membership. You will then see the situation of your accounts at December 31, 2022.

You will then be able to discover the details of your investments. Concerning the fund in euros, which benefits from a capital guarantee, you will read the amount in euros of your interest received as well as the rate of return net of management fees. As a reminder, this remuneration is calculated according to the profit-sharing rate (what this fund has reported to the insurer) and the guaranteed minimum rate.

This is an opportunity to see if your contract is performing. And to gauge whether its performance is up to that of other contracts and insurers. This year, the top 5 returns for 2022 are made up of Garance (2.80%), Retraite mutualiste du combatant (2.61%), then Carac, MACSF and Orada Vie which share the third step of the podium (2.50%). %). The global average is not known but it should probably approach 2%.

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Knowing how to decipher taxes and social security contributions

The interests of the life insurance contract are subject annually to social security contributions at the rate of 17.2%. A percentage that must be deducted from performance net of management fees is communicated publicly to your insurer. The rates listed above are all before social security contributions. So, for example, a euro fund earning 2% net of management fees actually earns you 1.66% after social security contributions.

On your annual statement, your insurer must give you details of these levies, and therefore the interest rate served to the insured, net of costs and (…) taxes and social security levies, to quote the Insurance Code.

Keep in mind, however, that these winnings are potentially subject to income tax (flat tax 12.80%, most often). To avoid this, simply keep your contract for a minimum of 8 years: you then benefit from a reduction of 4600 euros (for a single person) on earnings each year, in the event of withdrawal.

Taxation of life insurance: the rules in the event of surrender or withdrawal

2 – Unit-linked returns

To improve your returns, you may have invested a more or less considerable part of your capital in units of account (UC), which they do not benefit from the capital guarantee. As with the euro fund, CU performance is also detailed on your annual statement.

You will then discover the number of parts for each CPU, their net asset value (i.e. their value as of December 31) and the amount invested. Beyond the annual evolution of the past year, be curious. It is important to compare it with that of previous years to see if its overall return corresponds to your risk taking. But also to compare them with other UC offered by your insurer which may be more interesting.

Investing in UC also makes it possible to take advantage of rate boosts on the return of the euro fund. Insurers are increasingly offering a bonus system to their customers who devote part of their payments to units of account. At Crdit Agricole, for the Predissime 9 series 2 consumer contract, for example, those who invested at least 50% of their capital in unit-linked units were able to see the return on the euro fund rise to 2.70% compared to 1.90% for those with less than 25% UA in the contract.

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France Assureurs, the professional insurance federation, announced at the beginning of February that the total collection of life insurance in 2022 represented no less than 144.4 billion euros. An unknown sum whose share in UA has increased from 34% in 2020 to 40% in 2022.

3 – Fees

Beyond the profits made, the life insurance statement details the costs which were invoiced to you during the year 2022. You must check the management fees, generally between 0.60% and 1% for the fund in euros and the fees levied on the units of account, specifies Gilles Belloir, Chief Executive Officer of Placement-Direct.

The saver will thus be able to detail the costs specific to his units of account:

  • THE contract management fee, taken by the insurer. As with euro funds, these fees are most often between 0.60% and 1%. They sometimes exceed 1% if you have chosen pilot management.
  • THE asset management fees that is to say those deducted from the gross yield of the CUs by the management company. They include the internal management costs of these supports.
  • THE commission retrocessions. This is the part of the asset management fees that are passed on to the distributors of your life insurance contract, the custodian or the insurer.

4 – Benchmarks

The benchmark index represents the investment universe in which the manager of a CU operates. For each CU, if the index is available, it must be mentioned on the statement. This makes it possible to evaluate the performance of the unit of account relative to the market or sector of the UA invested. If the returns remain average and the fees high, it would be good to ask yourself about a possible change in your investments. Especially if the performance of the CPU is below its benchmark.

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5 – Returns on contracts of the same category

Thanks to the advances of the Pacte law, the statement must mention the average guaranteed return and the average rate of participation in the profits of contracts of the same nature marketed or closed to the marketing of the insurance company. This information should enable the saver to compare contracts with his insurer and possibly transfer his savings to a more profitable contract.

But to properly compare and consider transfer your capital on a new contract, it is also necessary to check the management fees deducted from these other contracts. equivalent net performance, the costs of old contracts may be higher than other more recent ones, says the managing director of Placement-Direct.

If the transfer of your contract to another offered by the insurer is not possible, or not financially attractive, then you may need to consider closing it and opening one elsewhere at a lower cost. A large number of life insurances marketed by online brokers or online banks do not incur payment fees, which can be close to 5% among their competitors.

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6 – Operations

On your statement, you can also see your transactions for the past year. All payments, arbitrages, movements (payment of dividends or coupons or change of allocation, for example) or redemptions made. Be careful though, insurers keep a certain freedom of presentation of all this information. For Philippe Crevel, Chairman of Cercle de l’Epargne, abundance of information kill information. It is difficult to treat them clearly. There would be improvements to be made to the statement in terms of visibility. CPU performance charts are difficult to read.

7 – An incentive to make contact

This statement also allows you to keep in touch. The statement of situation allows you to take stock of your contract and in particular the beneficiary clause. This is an opportunity to ask yourself the question and get in touch with your insurer to check if this clause is still up to date, adds Gilles Belloir.

There beneficiary clause designates the person or persons who will benefit from the accumulated savings, in the event of the subscriber’s death. All insurers have a standard clause: the spouse at the time of death; failing children born or unborn; by default, the legal heirs or designated as such by will. The subscriber can, however, name each of his beneficiaries, making sure to specify their full marital status and update this information regularly. Finally, the insured or subscriber can choose the distribution of his capital in the event of death.

Beyond a possible transfer of a life insurance contract or a change in the beneficiary clause, this annual letter can also be the time to call your insurer. To take stock and even, why not, negotiate management fees. If he already has several contracts with the same insurer, the saver will gain in legitimacy to negotiate his costs.

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