LIFE INSURANCE POLICIES FOR ASSET MANAGEMENT: BETWEEN GROWING AND POST-COVID NUMBERS

The incidence of life policies on households’ financial assets has grown steadily over the last twenty years, also thanks to tax benefits. In the post-Covid, these tools will be the best response to the vulnerability.

The weight of life insurance policies for savings management is constantly growing. According to the latest Ania report “We are Protected”, in 2019 life insurance companies managed savings that exceeded 770 billion, equal to 18% of households’ financial assets. A good leap forward if you consider that in 1999 the ratio between life insurance policies and activities was 5%. The figure is even higher than 14.2%, the average of some European countries such as France, Spain, the United Kingdom, Germany, Holland.

This growth is part of a general increase in all insurance instruments. As reported in an analysis by Il Sole 24 ore, these represent 22% of the total assets of the private banking sector compared to 16% in 2015.

trend that not even Covid has stopped and which, probably, is destined to persist even after the health emergency.

Life insurance policies for asset management: the reasons for the growth

The increase in the incidence of life policies on financial assets went hand in hand with the reduction in public welfare, in terms of pensions, health, protection concerning the ability to generate income due to illness or injury.

Life insurance play, in fact, a dual role. On the one hand, they are an alternative savings tool with which families invest their savings, according to appropriateness criteria. On the other hand, they represent a safety net against unforeseen events that can negatively impact the economic stability of an entire family, such as the reduction of working capacity or the premature death of one of the members of the family unit.

The legislator himself, aware that the public system alone cannot guarantee full coverage to citizens, has encouraged the underwriting of life policies through important tax benefits, such as the exemption from inheritance tax in the event of the death of the insured or deductibility. of chase account premiums to 19% (for TCM).

After Covid: the prospects for life insurance policies

The health emergency linked to the spread of the Sars-Cov-2 virus had, among its effects, to root a generalized sense of vulnerability. In the era of great advances in science and technology, the epidemic has highlighted how unpredictable events still exist that escape the control of man, forcing him to deal with his fragility.

Alongside this change that concerns the private sphere of people, another disruptive consequence of the Covid emergency concerns the sustainability of public welfare systems which in recent years had already seen a profound review with a view to rationalization. For example, what will be the repercussions of the decline in contributions paid to the social security system?

On the one hand, the arrival of huge capital from Europe with the Recovery Fund will allow reviving the economy, on the other it represents a new burden that will lock public spending, to avoid over-indebted the next generations.

In this context, insurance companies, especially life insurance, are candidates for a leading role in the post-Covid era. Thanks to the consolidated tradition of risk management, they represent an instrument of protection against vulnerability, which will be able to support and integrate public welfare.

To optimize the benefits of these tools, planning based on the awareness of needs and objectives is essential, through the precious work of intermediaries who will increasingly have a social role.

Leave a Reply

Your email address will not be published. Required fields are marked *