Life insurance is a form of savings that allows you to invest your money in the insurance company for good returns. It continues to interest many people today. However, many people still wonder about the importance of life insurance. Follow here in this article some of the advantages of a life insurance.
The best rate of return
Life insurance has the highest rate of return. Although the rates of return on almost all insurance products have been falling for some time, the rate of return on life insurance is still better. Some structures and financial institutions offer up to 3% per year as interest rate on life insurance. The rate is much higher when the insurance contract has a long duration. The more years the policy covers, the higher the rate of return. Life insurance is very profitable for those who like to take risks.
The flexibility of the contract
The life insurance contract is much more flexible. We all know that before the end of a life insurance policy, you may have an emergency or a more important investment opportunity or even a good project to invest in. So life insurance gives you the possibility to make a partial or total surrender of the contract. In the case of a partial surrender, you get back a portion of the value of the contract. On the other hand, for a full surrender, you get all your money back, but you lose part of the interest it has generated for you. Life insurance also allows you to invest the interest generated by the contract automatically.
Life insurance is tax-privileged. For example, when you surrender part or all of your policy, you receive two types of income: the capital and the interest. In the case of life insurance, it is only the interest that will be taxed; no tax will be applied to your capital. Moreover, the value of the tax to be applied depends largely on the age of the contract. For example, for a contract that is more than 8 years old, the taxes are relatively low.