Find the Right Financial Protection for You – Tips from the Best Financial Adviser!

Right Financial Protection For You

In these times of economic uncertainty, between the rise of unemployment and the foreseeable decrease of future pensions, saving regularly is a common concern among many people. The goal may be to set aside a few pennies to face difficult times, to build up capital to help children get into the workforce or to prepare a supplementary retirement pension. In any case, the question is often the same: what financial protection should I choose to save?

Regulatory changes, frequent adjustments in taxation, and uncertainties in financial markets and sovereign debt complicate the choice of the investor. Although there are many financial protection investment strategies including buy shares, we have listed the best two adopted by many.

BANK SAVINGS BOOKS

Right Financial Protection - Bank Savings booklet

Bank Savings booklet

The savings booklet is a medium that has been considerably developed in recent years, especially with the arrival of “specialized” players in this market: ING, AXA Bank, B for Bank, etc. It is a medium whose remuneration is often subject to a premium on entry and boosted rate for a given period on a limited amount.

Any person of legal age may open a savings account. Both banks and specialized players operate this product. An individual can own as much savings book as he or she wants. Savings books generally offer boosted interest rates (between 4% and 5%) over a limited period of a few months. Beyond that, the remuneration is much less, rarely exceeding 2% before taxation. The savings booklet is thus a method intended for short-term projects. The savings account is an investment that guarantees capital and offers a good pay. It is also liquid, funds are usually available within a week.

LIFE INSURANCE

Often called “the preferred investment”, life insurance is indeed the medium draining the major part of the savings. In fact, life insurance is not in itself a financial investment but rather a tax envelope within which each person will be able to subscribe to corresponding financial supports, according to his objectives and his appetite for risk.

Right Financial Protection - Life Insurance

Life Insurance

Since life insurance is like a real “Swiss knife” of financial assets, every investor should have a life insurance contract. It is also possible to have several life insurance contracts. Some insurance companies agree to open a contract for children. In this case, the parents are obviously managers of the contract until the child is of legal age. Life insurance reaches its fiscal optimum at 8 years. However, the method of calculating the capital gain on a redemption (withdrawal) is favorable to the investor in the first year of a contract. Also, the investment horizon depends on the allocation chosen by the investor.

Advantages:  in addition to its versatility (of low entry ticket, possible scheduled payments, no blocked funds), the main benefit of life insurance is its taxation. First of all, the gains are not taxed until the sums paid are withdrawn from the contract. There is almost no downside to life insurance as such. Since the offer of life insurance is very broad and a contract is not transferable, it is nevertheless necessary to subscribe a “good” contract. Care must be taken to limit costs and ensure that the contract is sufficiently open to meet all desired investment strategies.

To conclude, as is often the case with wealth management, there is no single solution and no product combines all the advantages without consideration. The objective of the investment, its expected duration and the risk that the investor is willing to carry are the determining factors of the choice. It should be noted that in these times of fiscal tightening, life insurance and the Savings Book should continue to be successful due to their attractive taxation.

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