Family and assets protection
Insurance policies which cover similar type of risks are generally grouped into insurance categories, each with its own different insurance management techniques. The main categories are two, the Life insurance policies and the Non-Life insurance policies (also know as Property & Casualty insurance policies or General insurance policies).
The Life insurance policies impose the insurer to pay a premium or a pension to the beneficiaries specified in the insurance contract in case of an accident to the life of the Insured or the Policy Holder (the two figures may coincide), such as death or disability.
These compensations qualify as proper savings, whose main objective is to protect the Insured and their family members against events influencing the duration of human life.
During the policy drafting, the beneficiary can be chosen freely, without particular restrictions, with the exception of those regarding the "legitimate share" to the heirs.
The Life policies have further sub-categories, as such:
- Type I, classic life insurances;
- Type II, birth and wedding insurances;
- Type III, as Type I, but with performances directly linked to the value of investmentd funds, market indexes or other financial benchmarks;
- Type IV, health insurance and insurance against the risk of not being self-sufficient (coverage in case of serious invalidity/injury caused by illness, LTC long Term Care);
- Type V, compounding operations;
- Type VI, management of collective funds set up to provide benefits in case of death or life, end or reduction of working activity (it includes pension funds, for instance);
Among the management activities, there is also the management of the so-called Separated Funds, normally connected to Type I Life insurances. These are funds specifically created by the insurance companies, separated from those of the company, in which the capital of the insured customers are being invested. This means that if the insurance company goes bankrupt, the return of the capital coming from insurance policies is guaranteed to the clients. The sums collected are mainly invested in bonds, and the prices of such securities (according to the principle of historical value/cost) are not subject to fluctuations in the financial markets.
Type III policies are instead full-life insurance contracts with a high financial content. The premiums paid to the insurance company are invested through asset management operations carried out by Banks, Brokerage Firms and Asset Managers in UCITS, whose benefits are given to the Beneficiaries upon the death of the Insured, or can either be redeemed in advance by the Policy Holder. The value of the operation depends on the amount paid and is directly linked to the performance of the underlying investments.
The Type III life insurance policies are grouped in 2 sub-categories as well:
- Index-Linked: the insurance premiums are invested in instruments whose returns are linked to the performance of one or more indexes.
- Unit-Linked: the insurance premiums are invested in investment products for capital appreciation.
Particularly, a Unit-Linked Type III policy has several advantages:
- diversification of investments;
- access to otherwise inaccessible investment tools;
- a superior professional service (you can choose an Italian or foreign asset manager and, as well, custodian bank);
- the option for the client to change the investment objectives over time;
- the premiums cannot be seizured or forfeited (as per ex. Art. 1923 c.c.), expect for those cases specified by law;
- the possible capital losses generated by an asset are compensated by the possible capital gains generated by another asset, so that the taxation of the financial gain is measured on the total return of the policy;
- interest capitalisation and capital gain accrued until partial or total surrender of the policy.
Currently, a significative advantage given by all life insurance policies is the exemption from the inheritance tax applied on the capital paid to the beneficiary in case of death of the insured, a tax which instead applies fully on the assets inherited through other types of investment tools.
Per more details, please check our Private Insurance section.