Independent Financial Advisor and Co-Founder of Affari Miei
January 24, 2024
If you are interested in investments and have heard of insurance you have probably come across Zurich Io Decido, the class I policy designed for those who intend to invest their savings and obtain a annuity deferred.
In this article you will find all the information about this product, you will see its features, its costs, advantages and disadvantages, and at the end of the article you will also find my opinions about it.
Let’s start!
This article talks about:
Zurich: here’s a presentation
The Zurich group has been present in Italy since 1902 and can count on over 1,000 collaborators; operates through a network of approximately 550 agencies, brokers, financial consultants, banks and also uses Zurich Connect, an online and telephone channel. It is a company with many years of experience and a very deep-rooted presence.
The company offers solutions designed to meet insurance needs both in the area of protection, savings and also social security.
The group has around 1.8 million customers and aims to broaden the customer base even further.
Zurich’s objective is to listen to people and companies, delve deeper into their needs and try to offer an increasingly better service.
What is a Class I policy?
Zurich Io Decido invests its premiums in a separate management, so we can say that it is classified as a class I policy: it is a policy that links the return on capital to a relatively safe investment.
The investment is safe as your money and savings will be invested in a separate management, a form of investment management that is separated from other activities and invests mainly in bonds, capable of offering greater stability in terms of security view.
If you are interested in learning more, I leave you this resource which could be useful to you to better understand the functioning of the product you are considering.
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The characteristics of Zurich I Decide
Zurich Io Decido is an insurance company whose objective is to build a annuity permanent revaluable income supplement. The company therefore undertakes to pay the insured, upon expiry of the deferral period, a annual deferred annuity for life revaluable annually, until the annuity installment expires prior to his death.
A part of the premium paid is used to deal with the demographic risks envisaged by the contract (such as mortality risk) and therefore this part, as well as that retained for the costs of the contract, does not contribute to the formation of the initial insured annuity that will be paid , revalued annually, until the death of the insured.
The performances
Let’s see what they are performance provided for in the contract.
We have in first of all the benefit in the event of survival: upon expiry of the deferral period the company pays the insured the revalued deferred annual annuity calculated according to the contractual conditions.
The other benefit however occurs in the event that the insured passes away, and the benefit in this case is divided into 3 parts:
In the case of a single premium deferred annuity: the payment to the chosen beneficiaries will be an amount equal to the maximum value between the single premium paid net of the implicit loading, revalued and the single premium paid net of the implicit loading; In the case of a deferred annuity with a constant annual premium: in this case the maximum amount will be between the sum of the premiums paid net of the implicit loading revalued up to the annual anniversary preceding the date of receipt of the death report, and the sum of the premiums paid including any fractions net of the implicit loading; In the case of a deferred annuity with a revaluable annual premium: in this last case the amount will be the maximum between the last premium paid net of the implicit loading multiplied by the number of annual premiums paid including fractions and the amount of the initial premium net of the implicit loading, multiplied by the number of annual premiums paid, including any fractions.
Payment of the premium
The contract provides for different rates, based on the form chosen for payments.
In fact, the payment of premiums may be either annual with a constant amount or annual with a variable or single amount.
The same payment can be divided into annual, half-yearly, quarterly or monthly instalments.
The maximum accumulation must be 1 million euros.
To the duration
The duration of the product ranges from a minimum of 5 years to a maximum of 30 years, and practically coincides with the life of the insured.
Who is the product aimed at?
Zurich Io Decido is aimed at customers who are looking for a deferred lifetime annuity. To subscribe to the product you must be an adult.
Costs
When choosing an investment, the most important part to consider is always the costs. In fact, they are those that impact the investment, the performance and consequently the result of the same.
In this regard I attach the directly to you screen from the official product document, so you can have a specific overview of how costs are distributed and above all how they impact performance (CPMA: average annual percentage cost):
For the disbursement of the income the cost per year is equal to 1.25%, while the annual management expenses amount to 0.8% in the case of a return on separate management of up to 4%, which can be increased by 0.02% for each additional 0.1% of reference of the management.
Revoke or withdraw
You can decide to revoke the proposal until the contract is finalized by sending a communication via registered letter. In this case the company will have to reimburse, within 30 days, the sum paid upon signing the proposal.
The ransom
The policyholder, provided that the conditions exist to obtain any reduction value, has the right to exercise the right of redemption.
After one year, the company can be asked to pay the accrued redemption value, resulting in the termination of the contract.
In the case of a deferred annuity with an annual premium, the contract, once the premium has been paid for at least three years, recognizes the policyholder who intends to suspend the payment of the premiums, the right to keep the contract in force for the value of the reduced annuity.
Tax treatment
We conclude our analysis with a look at the tax regime.
The premiums of life insurance contracts are exempt from insurance tax, while the benefits paid have a tax rate of 26%, which can be reduced in proportion to the part of the return attributable to government and equivalent securities, subject to ‘rate of 12.50%.
Furthermore, the capital paid upon the death of the insured is exempt from inheritance tax.
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Affari Miei’s opinions on Zurich I decide
We have finished our analysis and have seen all the features of this contract.
I hope this article was helpful to you if you were looking for insights into the Zurich Io Decido product.
At this point, I think, you are wondering whether it is worth investing in this tool or whether or not it could be convenient for you.
The product invests in separate management, so from a safety point of view we can only rest assured: if you are looking for a product that can offer you returns but without risking too much then you may have found what is right for you.
But are you sure it’s the only safe investment you can make? Don’t you think there are other solutions, perhaps even already efficient for you?
In this regard, I invite you to read this article where you will find many types of safe investments, you may discover that there is a more suitable solution for you!
If, however, you are looking for investments but would like to try to obtain higher returns, then I advise you to consult this list where you can find many useful resources for you: with these you will be able to enter the world of investments and begin to take your first steps in a more aware, looking for more profitable solutions that can help you obtain better returns, without paying too high costs.
As far as insurance is concerned, are you really sure that it is the right product?
In fact, I believe that investing in insurance is not exactly the best solution to follow, or rather, I believe that there are many other more suitable and more profitable tools to follow.
I hope I have told you everything that interested you and, before saying goodbye, I would still like to give you one last piece of advice that I personally care about a lot: study and train yourself before embarking on a path that could also lead you to incorrect choices.
You could, for example, start with these resources that I make available to you:
Enjoy the reading!
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