To cover unforeseen events, be able to face retirement with ease, plan a personal project… you’re probably well aware that there are many reasons behind the need to save. What you probably don’t know is that, in addition to the banking products that allow you to save, there is another formula that may suit you better. This is savings insurance.
What does it entail?
Savings insurance offers you the possibility to get a return on your money while at the same time saving in the medium and long term. By means of a premium – the frequency of which is up to you – you can build up a considerable amount without even realizing.
One of the advantages is flexibility. Unlike the vast majority of banking products, with savings insurance you decide on the amount of your instalments, their frequency, and any extraordinary payments. In addition, you have access to your savings or instalments after the first year, though some insurance companies usually charge you a small percentage to recover the money before the end of the agreed term; check the conditions, this is called the surrender value.
Insurance and much more…
Another big difference with bank savings accounts is that savings insurance can include complementary guarantees to enhance the policy: disability or death insurance, the possibility of making a will online, 24-hour medical telephone assistance, or access to a second opinion in the event of a serious illness are just some of the benefits associated with this type of insurance.
At the end of your savings period, some of these insurance policies deliver the capital and interest agreed upon at maturity; in other words, unlike bank deposits, there is no regular interest, but you should be aware that the rates offered are usually much more attractive than those of bank products. In addition, the insurance company guarantees that the conditions of the policy will be the same for the entire duration of the insurance. There will be no “surprises”: in the case of savings accounts, the bank only agrees to notify you in advance if there is a change in its conditions.
Another benefit is that the profits accumulating in the savings insurance are not taxed until the moment you have that money. This also offers significant tax savings.
As you can see, flexibility, liquidity, complementary guarantees and tax benefits are just some of the reasons for entrusting your savings to an insurance company.