For a long time, the retirement was performed by the intergenerational mutual aid between people. Several types of retirement was developed up to the social security.
However, the current system is in danger because of the demographic evolution. The active population is less important than the retired, compare to the past, and the financial reserve deplete. And projections for the future are not so good.
Successive governments have implemented some reforms to perpetuate the system. The latest one is about the pension’s revaluation, now it won’t be indexed on the totally inflation, but only for a part.
French people have realized the need to create by themselves their supplementary retirement income, and the life-insurance is good for this.
Outing annuities and partial buyback are the two possibilities offered by life-insurance contracts. But the first one includes an alienated capital, and the second one presents a risk of survive after the capital depletion.
Among life-insurance contracts, the Variable Annuities became in the middle of 90’s in United States. There are three phases in their life.
During the first one, the investor accumulates his saving by payment. The contract is provided with a minimum revaluation and a blocking system: it insure the placement against the decrease of markets. During the second one, the investor does predefined partials buyback until the capital depletion without alienation of it . After, if the investor is still alive, the third phase is set up and the insurance pays annuities which the value will be the same of partials buyback.
Although the Variable Annuities offers advantageous guarantees, they didn’t meet success in France. At issue, the several contracts with an advantageous tax, the cost of guaranties and the small target for this contract are the reasons why Variable Annuities didn’t work.
Moreover, Axa, who was the first to propose this contract in United States, suffered larges loses after the subprime’s crise, and the other insurance companies are not motivate to follow him in this direction, because risks are difficult to control.
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