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Review and Opinions on the HDI Policy

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Review and Opinions on the HDI Policy

Independent Financial Advisor and Co-Founder of Affari Miei

5 December 2023

If you are looking around to get an overview of the insurance investments and you came across HDI Future Objective then you are in the right place because today together we will analyze all of its characteristics and we’ll see what they are advantages and which ones disadvantages.

This is a useful product for those who are looking for a way to ensure their children or grandchildren have capital to make their dreams come true, to finance important projects.

At the end of the analysis you will also find mine opinions in this regard which may be useful for you to reflect on the product and above all to make an informed choice for your future and that of your children.

Let’s start!

This article talks about:

HDI Insurance: a presentation

As usual, before analyzing the product in detail, we begin with a brief presentation of the institute that offers the product, so that we can understand and be informed.

HDI Insurance it dates back to 1881: it is a very old company and therefore very 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 learn more about the history of HDI, you can read here.

What does class I policy mean?

HDI Objective Future is one class policy Iwhat does it mean?

We must first understand what it means and therefore in which instrument we are going to invest, to better understand whether it is a choice consistent with our objectives.

The policy in question invests in one separate management.

This means that the premium you choose to allocate to this policy will be channeled and invested in a separate management: a safe fund characterized by a low risk profile, which invests in safe and low-risk instruments. This ensures that we meet the needs of those who are looking for safe instruments and at the same time those who do not want to risk their capital too much.

It is certainly not a product aimed at those who want to obtain high returns: if you want to obtain a high return you must know that you will have to risk more.

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HDI Objective Future, here are the main features

L’HDI Objective Future insurance is a complete solution designed to ensure financial security and calm in the long term. This product stands out with several key features that make it an excellent choice for those aiming to protect their financial future.

The objective of this product is in fact to guarantee children or grandchildren capital to help them finance important projects, such as a particular course of study, or starting their own business, or to guarantee them a form of savings accumulation that offers the best results in the medium/long term.

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The performances

The Objective Future plan is a form of savings accumulation which through periodic payments ensures the liquidation of a capital, even in the event of the death of the insured during the course of the contract.

There are two main performances that are linked to the results of separate management:

Life case: in the event of the insured’s life at the expiry of the contract, the guarantee provides for the payment of the initial capital insured to the beneficiaries, increased by the annual revaluation quotas based on the performance of the Separate Management “Fondo Futuro”;
Death case: in the event of the death of the insured during the contract, the guarantee provides for the payment to the Beneficiaries of the insured capital, increased by the annual revaluation quotas only at the expiry of the contract. In this case the premiums following the event are not payable by the policyholder.

In addition to these benefits, the product offers a extended coverage which includes not only traditional events such as death and disability, but also a number of customizable options to suit individual needs. This allows customers to tailor their policy to their specific circumstances.

Payment of the premium

The extent of award depends on the range and level of guarantees provided for in the contract.

The premium is influenced by the duration of the insurance, the age, state of health and lifestyle habits of the insured.

The total capital must be less than or at most equal to €250,000, and the total amount of the prize must not exceed €5,000.

The duration of the contract

The contract has a minimum duration of 6 years and a maximum duration of 25 years.

The duration it must be chosen taking into account that the age of the insured, at the time of signing the contract, must be between 15 and 84 years, while that at the end of the contract cannot be greater than 90 years.

Costs

Now let’s analyze the cost part.

The costs and expenses that we sustain to invest and to subscribe to the investment have a decidedly notable impact on the returns, so it is always good to take them into account and analyze them as best as possible to get an idea of ​​how they can actually modify our returns and if their impact can be sustained or not.

I entry costs they range from 11% to 13% of the annual premiums paid, and in case of exit after 10 years (which is the period of time that is recommended as holding for those who subscribe to this product) the annual incidence is 2.1%.

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Are not expected exit costsIn fact, no exit amounts are charged on the redemption value.

I management costs amount to 3.1%.

There are no transaction costs and/or performance fees.

Revocation and withdrawal

You can either revoke or withdraw.

The revocation can be carried out until the contract is concluded: within 30 days of receiving the revocation notice the company will reimburse the contractor the sum paid upon signing the proposal.

Within 30 days of its conclusion you can also withdraw from the contract, by registered letter to HDI Assicurazioni.

The ransom

Il redemption value it can be requested provided that at least 3 years of premium have been paid. This redemption value is obtained by discounting the reduced capital for the period of time between the redemption request date and the contract expiration date based on the annual interest rate of 3.75% if the redemption occurs within one fifth of year from the effective date and equal to 3.00% if it occurs subsequently.

The policyholder has the right to reactivate the contract, within 2 years from the suspension of the payment of premiums (reactivation), by paying the outstanding premium installments increased by interest calculated at the annual reactivation rate, as well as on the basis of the period elapsed between the relevant date of expiry and reactivation date.

It is important to know that the total surrender value may be less than the premiums paid.

The risk

Il risk profile for this product it is classified as 2 on a scale ranging from 1 to 7.

This indicator refers to maintaining the product for at least 10 years, because then the actual risk can vary in relation to disinvestment in an initial phase or in any case the sum reimbursed can be even less.

The risk is low, precisely due to the nature of the instruments in which the product invests.

Tax regime

The tax treatment part sometimes plays a fundamental role in choosing one product over another, so it deserves our attention.

The sums paid in the event of death are exempt from Irpef and inheritance tax, while the benefits in the event of life provide for a facilitated taxation of capital gains in reference to the nature of a long-term savings plan and the composition of the investments of the separate management “Future Fund”. The part of the premium paid to cover the death risk enjoys a 19% tax deduction.

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Opinions of Affari Miei on HDI Objective Future

Now that we have reached the end of the analysis of this policy, all we have to do is draw our own conclusions.

First of all I invite you to read the KID in depth because I have tried to cover all the topics relating to the policy but obviously reading in detail is always advisable.

If we want to be honest, the investment component is a distinctive element of HDI Objective Future. This policy offers capital growth opportunities through a prudent management of investments. This means that in addition to insurance protection, policyholders can benefit from a potential increase in the value of their policy over the years.

As we have seen, the primary objective of this product is to build capital over time for one’s own children oi propri nephews, designed to achieve important projects even starting from small savings sums. Since it is then a separate management, the investment is guaranteed.

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.

If you are interested in putting some money aside for your children or grandchildren, you could also think of an alternative solution: I could suggest a PAC, which is a capital accumulation plan with which you can pay a sum of your choice every month for a certain period of time. , at the end of which the person you have chosen could end up with a nice nest egg.

If you are interested in this solution, here you will find many ideas for starting a PAC.

A critical issue relating to products of this type which here on Affari Miei we always try to insist on and which we want to make people reflect on is related to the costs: the costs for these policies are always high, and often have a very significant impact on returns which, as we have just seen, cannot be great.

If you are looking for other ways to invest, which are also more profitable and capable of giving you greater returns, I invite you to consult these resources.

I think I have told you everything I thought was correct for you to know and that I have also exposed myself to some alternative solutions; Before saying goodbye, I’ll also leave you with some guides that could be useful for you to start investing in an informed and profitable way:

Happy reading and good investments!

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