Life insurance is expensive and non-transparent. Still, I use it to save a lot of people. Why? Perhaps they do not know what fees to apply in the IE. How are you doing? See what fees you will find in one of the common IEs and how much they are higher than investing directly in funds.
I will not unnecessarily describe all the possible charges that are in life insurance. Most of the funds are absent from regular fund-investing programs, so you can earn more money.
I prefer to show a brief comparison of fees, revenues and the overall result when investing through IE and investing directly in mutual funds.
Investing through IEP vs. mutual funds
I compared the investment of € 100 a month for 20 years through insurance and directly through mutual funds. For insurance, I only counted on investing without an insurance component.
I will start with a graphical result. Blue is a deposit, red is the investment life insurance course and green is a regular investment into mutual funds.
Fees in investment life insurance are unnecessarily high
I’ll continue to see what’s behind it. The figure below shows the IE charges and the 20-year result. It is the real product of one of the largest insurance companies on the market. He is neither the cheapest nor the most expensive. But even the cheapest IE is more expensive than the most expensive investment programs.
These charges are tremendously high and are totally useless. Note the inconspicuous fund management fee, which is inconspicuous in the fee schedule. On the contrary, it shines as a moon in the clear sky. And the paradox is that the insurance company does not manage funds at all. It’s a charge for nothing.
Fund investment fees are incomparably lower
In this way, the fees and the result of regular investment in mutual funds without an insurance company appear. I count with an entry fee for funds of 3.6%. The total yield is 5% pa in both cases
The profit shown in this figure means the difference between investing through an investment life insurance of an unnamed insurance company and investing directly in mutual funds. Of course, to invest without an insurance company.
It really does not matter how you invest your money. If possible, be sure to avoid the “savings” life insurance policy and invest directly in mutual funds.