In short:
- Annual management fees on unit-linked supports come first: a few tenths of a point a year change the outcome over twenty years.
- A contract with no entry fee is now the online standard, paying one is an anomaly that needs justifying.
- The real difference lies in the range of available supports, especially whether ETFs and SCPI property funds are offered.
- The tax clock starts at opening: opening a contract, even lightly funded, starts the eight-year counter running.
Why two contracts are not equivalent
Life insurance is a wrapper, not an investment. What it returns depends on what you put inside and on what the insurer takes along the way. Two contracts showing the same euro fund can produce very different outcomes over twenty years, purely through fees and the range on offer.
The seven criteria to compare
1. Annual management fees on unit-linked supports. This is the charge applied every year to the whole balance. A gap of 0.4 points a year, compounded over twenty years, represents a large share of the final performance.
2. Entry fees on payments. Online contracts have abolished them. Paying them cuts into your capital from the very first euro invested.
3. The range of supports. A contract offering only in-house funds mechanically limits your options. The presence of index ETFs and SCPI property funds widens the possible strategies considerably.
4. Switching fees. Moving from one support to another should be free, or close to it. Charged switches discourage active management of the contract.
5. The euro fund. Look at the rate paid over several consecutive years, not the latest year in isolation, and check the access conditions, often tied to a minimum percentage held in unit-linked supports.
6. Management options. Scheduled payments, gain locking, automatic rebalancing: useful if you do not want to steer the contract by hand.
7. Soundness and service. The insurer itself, the quality of the interface, redemption and switching turnaround, and the quality of service in the event of death.
What the comparison looks like in practice
| Criterion | Contract to avoid | Benchmark contract |
|---|---|---|
| Entry fees | 2 to 3% | 0% |
| Unit-linked management fees | Above 0.90% | Around 0.50% |
| ETFs available | None | Several dozen |
| SCPI available | None | Several, at 100% of the unit price |
| Switches | Charged | Free |
The reflex on the tax clock
The tax treatment of French life insurance improves after eight years of holding the contract, not of holding the money. Opening a good contract early, even with a modest payment, starts that clock. It is one of the rare wealth decisions whose cost is close to zero and whose benefit is mechanical.
Frequently asked questions
How do you choose a good life insurance contract?
By comparing seven points: annual management fees on unit-linked supports, the absence of entry fees, the breadth of the range of supports (especially ETFs and SCPI property funds), free switching, the consistency of the euro fund over several years, automated management options, and finally the soundness of the insurer and the quality of service.
Which fees matter most on a life insurance policy?
Annual management fees on unit-linked supports, because they are charged every year on the entire balance and compound. A gap of a few tenths of a point a year becomes considerable over twenty years. Entry fees come next: they are avoidable, since online contracts have removed them.
Should you open a life insurance policy even with no money to invest?
Often yes. The tax advantage is triggered after eight years of holding the contract, not the money paid in. Opening a no-entry-fee contract early with a minimal payment starts that clock at practically no cost.