This pandemic period has changed our daily lives and the way we think about the future. Periods of unemployment, life changes and new career paths tend to increase. Everyone's liquidity can vary greatly during these transition periods. Adaptations in the way we live are essential and this requires increased financial protection.
In choosing our 3th pillar, the importance of flexibility and arrangements in difficult times is becoming an imperative for long-term solutions.
Here is a short overview of existing solutions and the possibilities offered by the 3th modern pillars.
Suspension of the premium
A major novelty in recent years, the suspension of premium payments, formerly reserved for banking solutions, exists in almost all insurance institutions. These solutions are excellent for short periods of time. Here is what the market offers:
- Total suspension from 1 year to 4 years: the bonus is stopped in its entirety
- Suspension of the savings part of the premium for 1 year at the end of the contract, you only pay the part covered in risk of death and/or disability
- Suspension of the payment of the total premium for 6 months and reactivation with payment of the arrears.
These possibilities exist most of the time after the payment of 3 to 5 annual bonuses and sometimes benefit from exceptions in some companies, such as during the Coronavirus where establishments allowed the suspension automatically to those who wanted it and regardless of the number of bonuses paid.
The reduction in the premium
As long as you do not fall into the minimum insurance company or bank premium, reducing the premium is a good solution in the medium term.
Indeed, the amounts indicated at retirement and the covers (if existing) decrease but the contract remains active in proportion to the premium still paid. The future possibility of re-increasing it also exists provided, when there are risk coverages, that a medical questionnaire is passed.
This decrease should be avoided in the first few years in insurance solutions. Indeed, institutions make a calculation that penalizes the assets committed. This penalty fades over time and becomes obsolete after a period of between 10 and 20 years depending on the solution chosen.
The release of premium payments
The long-term solution par excellence. This means stopping the premium payment and your residual capital continuing to work. This solution is definitive and may be beneficial if the instrument in which your capital is invested still generates a profit.
Whether in banking or insurance, you must review the entire solution, because you have the possibility of transferring your assets to another solution or institution. Some establishments also require this transfer.
All of the conditions mentioned above are becoming important in your choice. This is why it is important to think carefully about your situation and to get advice from a neutral and objective organization.
