The advantages of taking out insurance

Insurance often evokes feelings of financial insecurity. Some people find it a way to steal money from others and others do not know what it is for. However, by signing an insurance contract, we are putting much of our money in good hands. This allows, over the long term, to build up savings and also to insure against possible risks, depending on the type of insurance chosen: personal insurance, property or claims insurance, and insurance activity.

Taking out insurance also has advantages, still little known to the public, in terms of security, taxation, and profitability. But rest assured, we will explain it to you.

Real profitability

How can insurance be profitable? Insurance, in practice, is a contract by which the insurer undertakes to pay a certain sum to the insured on the occurrence of risk by means of the payment of a premium or premium periodically. There are several kinds of insurance, but all allow the insured to benefit from certain profitability, from an early and well-deserved retirement.

Some insurance plans are compulsory. But whether it is for a repair due to a disaster, or an unfortunate event or just by the expiration of the deadline (retirement for example), the insurance always benefits the insured, during his life and even after (in the case of life insurance). In fact, provident, health, or claims compensation all come from the capital paid by the insured for years. Even if in the end, no damage was suffered, fortunately, the insured can still claim compensation for the paid-up capital with interest, or in the case of life insurance, transmit the amount to the beneficiary of his choice.

For property insurance, we recognize the need to be insured, when the flood is too high or during the encumbrances. Many materials are destroyed and our vehicles are among the first. Profitability is at the level of reimbursement of the price of the destroyed item (s).

A definite tax advantage

We don't talk enough about it, however, insurance offers a considerable tax advantage.

The case of life insurance illustrates this. Indeed, upon the death of the insured, the beneficiary receives the sums paid out of the estate. These will, therefore, be transferred to him without any tax, up to € 152,500 per person if the insured person has saved them with his insurer before his 70th birthday.

In the case of a withdrawal or redemption, the taxable rate has been fixed by the fixed discharge to guarantee a low tax levy:

• flat rate: 35% before 4 years, 15% between 4 and 8 years and 7.8% after 8 years;
• allowance: after 8 years, on € 4,600 (single person) or € 9,200 (married couple) on the interest portion of the withdrawal;
• Partial withdrawal: the taxation applies only on the share of interest and not on the share of capital.

In fact, all products with capitalized interest are not taxable for the duration of the contract. Interesting, right? This gives us a real idea of ​​what insurance is.

The insured can also request an advance when he proves a real need for emergency money. In this case, it should be noted that these advances are not taxable. This makes perfect sense, given the state of emergency of the request. Attention, however, the insurance contract clearly stipulating a periodic contribution, you will have to reimburse its advances with in addition the advanced capital.

Ensured security

The feeling of uncertainty and fear when the arrival of danger, an accident, or even a risk becomes less important when we know that we will still be insured and that the amount lost to us will come back after. Far from us the idea of ​​causing an accident, it will be a fraud of insurance punishable by a heavy penalty, but it is good to know insecurity .

In a sense, security adds to profitability. But thinking about it, the magic of insurance is that procedures have been made easier to allow not only to increase the number of underwriters but also an evolution in the very concept of insurance. We cite for example the inexistence of an amount limit, no maximum and minimum, the indefinite duration of the insurance, the possibility of redemption subject to the free choice of the parties, etc.

It also seems normal to us, before concluding, to give you some instructions for information. The insurance being governed by the contract, it is advisable to read and study all the clauses before signing so as not to be caught off guard later. Every word and every sentence has its importance, so you should make sure that none of them hide a vice or a fraud, otherwise the contract will be void and of no effect. A word to the wise!