Life insurance is - despite all predictions to the contrary. But viewed in the light, the life insurance is only for a few investors really ideal. Often it is completed, although it really does not assure there. Only rarely, it serves as a real protection for survivors in the event of death. Most life insurance companies are now mere provision for old age.
Here, the first disadvantage is noticeable. Because the life insurance mixes two things together do not really belong. Firstly, the protection against the risk of death,. Second, for age. Both goals have their place. But they should not be mixed up with each other.
Because the result is a highly non-transparent product. Firstly, your contributions are first passed through a giant machine, which causes high costs. As a rule of thumb: All contributions must be paid in the first one to two years, ending up as a commission on sales.
Next, pulls off a decent chunk of the insurance to cover their risk in the event of death. If you want to protect anyone, even this money is wasted.
Ultimately, about 75 percent of your contributions will be invested - the so-called savings component. In this part of the insurance company guarantees you a guaranteed interest rate of from 2012 puny 1.75 percent - of course, before taxes and inflation.
The guaranteed interest rate must not be the last word. The return on the savings component can - depending on the insurance - well be higher. Nevertheless, the investor can hit with a newly concluded life insurance hardly today's inflation - which is the second minus point.
But there is still a third shortcoming that only few people know. It is the investment strategy. Insurance set for about 85 percent of the savings portion in bonds, of which about one-third in government securities. For comparison, shares are held by meager five percent, three percent in real estate.
Investors should be aware, therefore, that he ultimately invests primarily in life insurance cash values ??(see also my article: Money values ??vs. real values.). He is not with this investment strategy of rising inflation protected. These are the risks of investing in government securities, which can be predicted with rising national debt is difficult.
Particularly controversial is that these risks are even reinforced by the policy. The explosive device is located in the new capital adequacy rules for insurance companies, which will take effect from 2013. Insurance must be less, depending on what type of investment they invest client funds, to demonstrate different amounts of capital (ie capital that the owners can not be reclaimed without further notice). Supposedly risky investments must be backed with more equity than low-risk. So far so good. The problem exists in the classification.
Because during corporate investments (22% equity) and real estate (25% equity) classified as high risk, is a charter for government bonds: zero percent equity! The new capital adequacy rules do so as if there is investment in government bonds at no risk.
The result is in sight. Since capital is scarce, insurance companies will in future have to rely more on government securities. The clean bill applies to all government securities. And because the insurer desperate because of the low interest rates are already on the lookout for something higher returns, it is expected that they will lay increasingly loose bonds of states in its deposits.
Will find it difficult to say whether the policy is here out of sheer inability or whether one is consciously using these schemes provide a cheap state financing through the insurance money customers. It is clear, however: For investors buying a traditional life insurance is increasingly becoming a suicide mission.
Here, the first disadvantage is noticeable. Because the life insurance mixes two things together do not really belong. Firstly, the protection against the risk of death,. Second, for age. Both goals have their place. But they should not be mixed up with each other.
Because the result is a highly non-transparent product. Firstly, your contributions are first passed through a giant machine, which causes high costs. As a rule of thumb: All contributions must be paid in the first one to two years, ending up as a commission on sales.
Next, pulls off a decent chunk of the insurance to cover their risk in the event of death. If you want to protect anyone, even this money is wasted.
Ultimately, about 75 percent of your contributions will be invested - the so-called savings component. In this part of the insurance company guarantees you a guaranteed interest rate of from 2012 puny 1.75 percent - of course, before taxes and inflation.
The guaranteed interest rate must not be the last word. The return on the savings component can - depending on the insurance - well be higher. Nevertheless, the investor can hit with a newly concluded life insurance hardly today's inflation - which is the second minus point.
But there is still a third shortcoming that only few people know. It is the investment strategy. Insurance set for about 85 percent of the savings portion in bonds, of which about one-third in government securities. For comparison, shares are held by meager five percent, three percent in real estate.
Investors should be aware, therefore, that he ultimately invests primarily in life insurance cash values ??(see also my article: Money values ??vs. real values.). He is not with this investment strategy of rising inflation protected. These are the risks of investing in government securities, which can be predicted with rising national debt is difficult.
Particularly controversial is that these risks are even reinforced by the policy. The explosive device is located in the new capital adequacy rules for insurance companies, which will take effect from 2013. Insurance must be less, depending on what type of investment they invest client funds, to demonstrate different amounts of capital (ie capital that the owners can not be reclaimed without further notice). Supposedly risky investments must be backed with more equity than low-risk. So far so good. The problem exists in the classification.
Because during corporate investments (22% equity) and real estate (25% equity) classified as high risk, is a charter for government bonds: zero percent equity! The new capital adequacy rules do so as if there is investment in government bonds at no risk.
The result is in sight. Since capital is scarce, insurance companies will in future have to rely more on government securities. The clean bill applies to all government securities. And because the insurer desperate because of the low interest rates are already on the lookout for something higher returns, it is expected that they will lay increasingly loose bonds of states in its deposits.
Will find it difficult to say whether the policy is here out of sheer inability or whether one is consciously using these schemes provide a cheap state financing through the insurance money customers. It is clear, however: For investors buying a traditional life insurance is increasingly becoming a suicide mission.
