Insurance rhythm of life

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What is good for homeowners and people, who like to buy? The building societies at the savings phase usually lasts 7-9 years, life insurance and annuity contracts run for 30, 40 years or even longer. The interest rates are guaranteed for some time well above the level and the providers must rely on its reserves to increase interest rates.

Just capital-life insurance was preferred by the Germans for many decades as a private pension scheme and now this bias is beginning to take revenge. Many have even financed the property through a life insurance policy. One problem is that the insurance companies have very little equity exposure in their own investments. Thus, for the insured were brought billions. And now there is a further danger for the companies, because the Treasury fears according to a report by the Handel blatt, that the insurers can be brought to a serious imbalance.

"For these companies, the existing investments are no longer sufficient to cover to the actuarial reserves and capital requirements." This nightmare scenario leads to changes in the insurance. You must turn to other that yield higher returns, but are relatively low risk. Therefore, some are already investing in electricity networks, in hospital groups, and others.

Also, these alternative investments are only available to the financially sound insurance companies, because the measures planned by the EU Commission new capital requirements ("Solvency II") would charge for such investments of a higher level of equity as collateral. This raises the question of how investors have to respond to the crisis. First and foremost, one must to think about alternatives to life insurance, because if there is no better form of investment, then a bad investment is usually better than none. Terminate the long term life insurance contracts! If you cannot play for both savings rates, then you can put your life insurance and non-contributory.

Then keep the previously acquired rights and the previously accumulated savings already are achieved together with interest. They will be retained and continue to accrue. The projected maturity value will decrease naturally when they no longer make additional payments.