Independent Financial Advisor and Co-Founder of Affari Miei
January 30, 2024
If you are interested in making an insurance investment and are interested in these products, perhaps you will also have read about HDI Investment Objectivethe policy that is distributed by HDI Insurance.
Today we will see together all its characteristics, risks, advantages and disadvantages and then at the end of the article you will also find my opinions about it.
Enjoy the reading!
This article talks about:
HDI Insurance: a few words about the institute
Before analyzing the product in detail, I would like to start with a brief presentation of the institute that offers the product, so as to have more information.
HDI Assicurazioni dates back to 1881: it is a very old company and also for this reason rooted in the territory.
An important stage in its history that deserves mention relates to the year 1997: in this year the company became part of the Talanx group of Hannover, a large German insurance group.
HDI’s vision is based on the centrality of its customers as it wants to always be connected with the customer, in order to improve the quality of the offer and service.
If you want to know more about the history of HDI, you can read here.
It is a class I policy: what does it mean?
HDI Objective Investment is a class I policy.
The policy in question invests in separate management, i.e. the premium you pay into this policy will be channeled and invested in a safe fund which is characterized by a low risk profile, i.e. it invests in safe and low-risk instruments.
This ensures that we meet the needs of those who are looking for safe instruments and perhaps do not want to risk their capital too much; however, if you want to obtain a high return you must know that you will have to risk more and therefore I directly advise you to turn to other financial instruments and aim for other solutions.
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HDI Investment Objective: let’s see the characteristics
HDI Investment Objective it is a whole life insurance dedicated to investment in the event of death with revaluable capital and a single premium and additional payments.
This is the definition given verbatim in the information document. Now let’s see what it means and how the investment develops.
Let’s start by looking at the performance, which is directly linked to the results of the separate management and which, in the event of the death of the insured, is characterized by the payment of the sum equal to the total capital up to the date of the event. When the insured person dies, the beneficiaries will receive a sum equal to the greater value between the total capital and the total insured capital, re-proportioned following any partial redemptions.
The prize
Let’s now see what it consists of award to be paid into the policy.
The policyholder can pay the premiums (the initial single one and additional payments) to the company by check or debit from a current account.
Il single initial premium it must be at least €50,000 and not more than €2 million.
After the conclusion of the contract, the contractor will be able to carry out some additional payments in any month of the year and cannot exceed 3 million euros.
The duration of the contract
The contract is a whole life and therefore its duration coincides with the life of the insured.
Furthermore, it is not possible to suspend the guarantee.
Costs
If you have already had the opportunity to read other articles or other content of ours, then perhaps you will know that we give a lot of importance to costs.
I costs they are in fact those that significantly impact your performance and therefore the final result of your investment.
Sometimes we don’t think about it, instead they must be monitored and kept under control.
I entry costs they amount to 0.30% of the single premium paid at the time of signing up, and you will also have to pay another €100 in fixed costs.
I exit costs instead they range from 1.50% to 0% of the requested amount, depending on the year in which you decide to exit the investment. However, if you remain invested until the end of the recommended holding period, then you will not incur any costs.
The management fees amount to 1.40% or 1.50% and these are withheld directly from the annual return of the separate management, depending on the total amount of the premiums paid.
I transaction costs are not expected.
Revocation and withdrawal
The revocation is not foreseen, while instead the withdrawal must take place within 30 days of signing the proposal, inviting the request to the insurance company via registered letter or certified e-mail.
Within 30 days of receiving the notice of withdrawal, the insurance will refund the premium paid to the policyholder.
The ransom
After one year from the effective date of the contract, the policyholder may request full liquidation of the surrender value, and the contract will then be terminated.
The value of total redemption is given by the sum of the revalued capital on the last annual anniversary of the revaluation, and the initial insured capital of the additional payments made during the year and revalued up to the date of the redemption request.
The right to redemption can also be exercised partially, as long as the amount is less than €5,000.
I redemption costs they are divided as follows:
During the second year: 1.50%; During the third year: 1%; During the fourth year: 0.50%; From the fifth year onwards: 0%.
The risk profile
The profile of risk for this product it is classified with 2 on a scale ranging from 1 to 7.
This is a low risk, typical of separate management, and refers to maintaining the product for the recommended period of 8 years.
This indicator is, however, an indicative indication of the level of risk.
Tax treatment
The tax treatment may change if the relevant legislation changes in the future.
However, let’s say that taxes and all other legal charges relating to the premium and the contract are borne by the policyholder or the beneficiaries and entitled parties.
The premiums paid are not subject to any insurance tax and, in the absence of a component relating to the demographic risk of mortality, do not give the right to a tax deduction on the income declared by the policyholder for the purposes IRPEF.
The sums paid in the event of the death of the insured are exempt from the substitute income tax only for the portion of the same relating to coverage of the demographic risk of mortality. For the remaining part, the substitute tax is applied in the amount and according to the methods established by the regulations in force from time to time.
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Affari Miei’s opinions on HDI Investment Objective
We have reached the end of our review, so now all we have to do is draw our conclusions and think together.
First I invite you to read the KID in depth because you may find more information, even if I tried to tell you everything, it is better to consult the official documents and really read anything to get a complete overview and not risk choosing the wrong product.
The policy, as we have seen, invests in one separate managementthat is, it offers the possibility of capital growth thanks to prudent investment management which allows those who choose it to obtain a relatively peaceful and not too risky investment.
In this regard, if you are looking for safe investments I invite you to consult this article where you will find many ideas to start investing in safe products without risking too much.
Maybe you will have understood that this policy is suitable for you if you really want it risk little and if you are ready and aware of having to settle for relatively low returns.
If you are looking for greater growth or if you really want to achieve high returns, this certainly may not be the right product for you.
Rather, I can advise you to look for other solutions: here on Affari Miei we often talk about ETFs: these are passively managed funds that allow you to invest diversifying at best and above all they manage to reduce management costs because, unlike mutual investment funds, there is no manager who takes care of your investment but the fund replicates the benchmark in a passive manner and therefore the costs are very more content.
Before saying goodbye I would also like to suggest that you increase yours financial awareness delving into the world of finance in order to have more information and consequently be able to make better decisions for you and your investments.
Here are some guide who can help you in this regard:
Enjoy the reading!
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