Life insurance: What to do with your stocks in the midst of a stock market?

The brutal fall in stock markets worries many savers, including life insurance holders. What is the best strategy to adopt in this stock market storm?

• 
  

  To safeguard
  

  
  
  

  Saved
  

Difficult to have missed the slump of the past few days on the stock market: following advertisements to raise customs duties by Donald Trump, Wednesday April 2, the S&P 500 (which brings together the 500 largest American companies) has experienced its highest decline since March 2020, and the Eurostoxx 50 (the 50 largest European companies) since March 2022. Also, without being a confirmed trader Pronounced financial markets on your savings, and in particular for your life insurance.

First of all, it must be remembered that “Exposure to market risks is quite low in France”as Philippe Crevel notes, director of the circle of savings. The savings of the French is largely invested in booklets and in life insurance, an investment so the outstanding is mainly secure: at the end of 2023, it consisted in 72% funds in euros. However, these guaranteed capital supports are mainly made up of bonds, with a marginal share of shares: 7.3% on average, according to the Good Value For Money site. It is in the rest of the outstanding, i.e. 28% of account units (UC), that we can find corporate titles.

It all depends on your management mode: free or controlled

It is therefore only if you are invested specifically in shares via UC that you can be impacted by this fall in the financial markets. Two possibilities then: if as the vast majority of savers, you have opted for controlled or mandate management, you will have nothing to do: “In this case, the financial management of your contract is delegated to a manager or to finance professional whose job is”recalls Thomas Perret, founder of the Fintech my little placement. It is therefore these experts who will decide for you the strategy to adopt in the face of the fall in courses

If, on the other hand, you have chosen free management, it is up to you to navigate this stock market storm. You might then be tempted to redirect your capital held in the form of shares to the Euros fund of your life insurance, or even withdraw your savings for fear of losing more. Two solutions to be excluded for Gilles Bellir, Director General of Placement-direct.fr: “Getting an arbitration to the Euros fund or a withdrawal when the markets are falling is first to take your losses, and it is mainly deprived of a possible rebound in the markets, which statistically is more likely to intervene after a decline.” This without counting that it is very difficult to “timer” the market with an envelope like life insurance: between the request for buyout and the moment when the order has passed, it can flow one to two days, “Who can make you lose even more if the courses have continued to fall, for example”warns Gilles Bellor.

In other words, without imperative obligation to take out your capital, it is better to stay invested and not give in panic. “You must keep the course towards your investment project (marriage, real estate purchase, children’s studies, etc.) and remember that life insurance is a long -term investment product”abounds Thomas Perret. On the long time, it should be remembered that the investment in equities has the best return among all investments: 12.4% per yearbetween 1983 and 2023, according to the Institute of Real Estate and Land Savings (IEIF), despite moments of falling markets like the one we currently know.