If you already have life insurance, you may be disappointed with its performance and/or the lack of transparency regarding how your savings are allocated… During your travels, you come across ISR life insurance: a high-performance life insurance policy that allows you to invest responsibly. You then ask yourself the following question: is it possible to transfer your old life insurance policy to a new one?
Why consider transferring your life insurance?
Before presenting the different possibilities for transferring your life insurance, let’s first look at the reasons that may justify this change.
Transferring your life insurance to exit the euro fund
The vast majority of life insurance policies are invested in a single euro fund with guaranteed capital (no risk of loss). This is called a euro fund or single-support life insurance.
This situation is leftover from the economic paradigm of 20 years ago when risk-free savings were relatively well-remunerated. It was then unthinkable for most households to seek performance on the financial markets. As long as savings were profitable, there was not much reason to be interested in them. But times have changed…
Today, euro fund life insurance offers returns that are too low to be a sustainable long-term investment solution, particularly due to the return of inflation. Combined with high management fees, your savings lose purchasing power as time goes by, as you can see in this table.
Consider transferring to boost your savings with new-generation life insurance.
Transferring your life insurance can also be a great way to boost your savings thanks to:
- Save on life insurance fees: A more cost-effective contract that only charges management fees. Old life insurance policies are often very expensive for savers. They still charge fees that are no longer necessary, such as exit fees, payment fees, and/or entry fees. As with other vehicles, the lower the fees on your life insurance, the more you optimize the performance potential of your savings.
- Access a new range of media: Old life insurance policies often offer old media, designed at a time when savers were captive to their bank advisors. Inevitably, these media were designed in the interest of the seller and not necessarily in the interest of the saver. The variety of the latter was generally low and above all, none stood out for its quality (such as its ability to beat its benchmark index about actively managed funds). Today, new-generation life insurance policies mainly offer ETFs because of their low management fees and their performance.
- Optimize media costs: Thanks in particular to ETFs and other low-cost or less expensive media, you optimize the performance potential of your savings.
Improve the transparency of your savings.
The other negative point of euro fund life insurance and traditional life insurance lies in the cruel lack of transparency regarding the way your savings are invested. For example, a euro fund collects your savings without you realizing your investment choices. You can then indirectly finance oil companies, arms, dictatorial states… In short, investing in a euro fund is like eating an industrial dish without a label, it is better to avoid it!
However, it is now possible to benefit from much better transparency to combine performance and socially responsible investment. Indeed, more and more savers want to combine their environmental awareness with the reality of their investments so that their daily actions are not destroyed by the way their savings are used. Thus, it is entirely possible (even desirable) to consider transferring your old life insurance to a new one, and preferably an SRI one!
Goodvest Tip: Our new generation life insurance is aligned with the Paris Climate Agreement, allowing you to make profitable and responsible investments with complete transparency. Subscribed directly online, our life insurance combines the best technologies to facilitate the management of your savings while allowing you to benefit from ultra-low fees to maximize your return potential! Discover the performance of our life insurance now !
How to transfer or change your life insurance?
In principle, in most cases, transferring a life insurance policy simply involves closing your old policy and opening a new one. This means making a full redemption on your old life insurance policy, i.e. transferring your life insurance policy to a current account, and then making a payment on your new life insurance policy.
This practice then causes you to lose the tax seniority acquired from your old contract, but as we will see, it is possible to use the Fourgous amendment for a transfer without loss of seniority.
Fourgous transfer and PACTE law the transfer of a euro fund life insurance policy to a multi-support life insurance policy without losing tax seniority
The Fourgous transfer, named after the instigator of the amendment, allows the transfer of sums held in a single-support contract to a multi-support life insurance policy while preserving its tax seniority and without making the tax on the gains made payable.
This single-support/multi-support distinction is mainly due to the transfer of life insurance invested in a single euro fund (guaranteed capital support) to life insurance whose capital is invested in several OPCs or ETFs (investment funds) with non-guaranteed capital.
In other words, a Fourgous transfer mainly aims to abandon the low returns of euro funds to invest in products offering much better performance provided you are prepared to take more risk. This is also the perfect opportunity to give more meaning to your savings by considering socially responsible investments through SRI life insurance. For example, you can invest in a wide range of funds dedicated to ecological investment.
What are the conditions for transferring your life insurance with the Fourth Amendment?
To benefit from the Fourgous transfer, you must respect a certain number of conditions:
- All amounts from the old contract must be transferred to the new one;
- The savings of the new contract had to be allocated in 20% minimum units of account (ETF or OPC). In other words, it was quite possible to still invest mainly in a euro fund up to 80%. However, since the Pacte law, this rule has been removed in favor of the insurer’s free choice on the minimum allocation to be respected;
- The transfer of the life insurance contract must be carried out with the same insurer.
Note: This obligation to transfer to the same insurer is particularly restrictive and largely favors traditional market players to the detriment of savers. With other innovative players in the sector, we have been campaigning for 3 years to change this rule in order to free savers from their overly expensive contracts!
Is it possible to transfer your life insurance to the new ISR Goodvest life insurance while retaining tax seniority?
The Fourgous Amendment is clear on one point: the transfer of one life insurance policy to another allowing the preservation of tax seniority must be done with the same insurer. It is therefore impossible to benefit from the Fourgous Amendment to change insurers.
However, you should know that at Goodvest, we are not insurers. Our job is to create, in collaboration with an insurer (Generali), an SRI life insurance policy that is meticulous about the financial and extra-financial quality of the funds offered. In addition, our role is to advise you on the best way to allocate your savings according to your moral criteria and your financial objectives thanks to our profiled management algorithm. So to speak, we bring transparency to your savings to make them grow responsibly.
If your old life insurance was taken out with Generali, you can transfer it to ISR Goodvest life insurance while retaining the tax seniority!
Otherwise, and if you wish to open your Goodvest life insurance, two options are available to you:
- Transfer your old life insurance to the new one with a total buyout by abandoning the tax seniority. Know in truth that 8 years is a relatively short time in terms of investment. However, it corresponds to an excellent horizon to invest in risky investment funds with high returns while minimizing the risks of volatility (short-term market declines). This allows you to benefit from long-term upward trends. Keeping the tax seniority will ultimately not be of much use to you, since most savings objectives involve investment horizons greater than 8 years (at Goodvest, however, you remain free to withdraw your money at any time!);
- Open an ISR Goodvest life insurance policy while keeping the old one. Indeed, unlike the PEA (share savings plan), you can open as many life insurance policies as you want! Your two life insurance policies can therefore easily coexist and meet different wealth objectives!