When taking out insurance or choosing a suitable financial investment, it is important to take into account the different types of insurance contracts and financial investments.
Insurance contract and financial investment
A financial investment means the blocking of a total of a savings account in order to generate profits. This amount must be locked within a certain period of time. This indicates an invested amount that earns interest. The saver makes his or her funds available to a banking institution so that he or she can take advantage of a very high return. This type of investment can be suitable for a variety of asset objectives. The insurance contract is the legal link that unites an insurance company with a subscriber, the insured, and commits them to certain obligations and rights. It is a “contract by which the subscriber is promised by an insurer, on his behalf or that of a third party, a benefit, generally a pecuniary benefit in the event of the occurrence of a risk, in return for the payment of a premium or contribution”. The insurance contract is an agreement between an insurer and an insured that determines the rights and obligations of each party. The insurer undertakes to provide a defined benefit if the risk that one wanted to cover appears.
The different insurance contracts
There are two main categories of insurance: those covering an individual and those covering property. However, it is also possible to take out several insurances in the same contract. This is known as “multi-risk” insurance. Damage insurance provides compensation in the event of a claim. It includes both liability protection (civil liability, family civil liability or professional liability insurance) and property protection (damage to the vehicle, protection of movable or immovable property). For example, in the event of a road accident, it guarantees, among other things, compensation for damage to the car and is therefore necessary even if, in most cases, it is not compulsory. This is particularly the case with pension provision. There are two levels of damage cover: collision damage cover (enabling an insured to receive compensation in the event of an at-fault accident with the presence of an identifiable third party) and all-accident damage cover (enabling an insured to receive compensation in the event of an at-fault accident even in the absence of a third party).
Secondly, personal insurance is intended to cover risks relating to individuals such as personal injury, illness, death or disability. A distinction is made between provident insurance (loan guarantee, daily allowances, education allowance, etc.) and health insurance, which is subdivided into two distinct categories: compulsory insurance (social security) and supplementary insurance (mutual insurance companies, insurers, etc.). Personal insurance can be taken out either individually or collectively. Some contracts allow the constitution and payment of savings in the form of capital or annuities. This is notably the case with life insurance.
The different types of financial investments
There are different types of investments. Most often, savers choose the interest-bearing account or the savings account when they want to entrust their funds to a banking institution so that they can grow. In addition, if you like the banking institution to look after your interests, you should choose the unregulated or regulated passbooks. These are classified as investments with guaranteed returns. These allow you to choose passbook accounts, super passbooks, yellow passbooks, people’s savings passbooks and sustainable development passbooks. In the second category, there are securities accounts, multi-support life insurance and stock market investments.