Discretionary Life Insurance Management: The Keys to Success

Self-directed management allows investors to manage their own investments within their life insurance policy. This management approach offers a great deal of freedom, but also requires informed decisions. Investment vehicles, asset allocation, automatic options: an overview of the rules of the game.

Managing your own investments with discipline
By default, multi-asset life insurance policies offerself-directedmanagement. The investor chooses the investment vehicles in which to invest their savings: euro funds, unit-linked funds (UC), real estate, ETFs, and sometimes even direct stock investments. They also decide on the weighting of each vehicle, the frequency of asset reallocations (transfers between vehicles), and can set up certain actions to occur automatically.
 

This approach to investment management contrasts with profile-based management (based on risk profiles) or delegated management (managed by a professional). Today, with online platforms, access to self-directed management has become more widespread, even if it may still be subject to a certain savings threshold or require the involvement of an independent advisor.
One of the key criteria is the number and quality of available investment vehicles. Some plans offer only a few funds, while others offer several hundred: dynamic euro-denominated funds, thematic unit-linked funds, real estate investment trusts (SCPI), real estate investment funds (OPCI), index funds, private equity, structured products, fixed-term funds…

Manual or automated rebalancing: mastering the tools
Manual rebalancing is generally free in online plans, but may incur a fee (0.5% to 1%) in traditional plans. At the same time, many life insurance policies now include automatic options that can be activated at no cost:
• Loss limitation (stop-loss): automatically divest from an investment vehicle if its value falls below a certain threshold.
• Locking in gains (stop-win): transfer gains to a more conservative investment vehicle.
• Gradual investment: spreading a contribution to unit-linked funds over several months to smooth out the purchase price.
• Interest reinvestment: reinvesting the interest from a euro-denominated fund into unit-linked funds.
• Automatic rebalancing: maintaining a target asset allocation despite market fluctuations.
 

These tools facilitate semi-active management, without the need for constant intervention. But be careful: some options are not compatible with one another or have minimum requirements (investment amounts, fluctuation thresholds, etc.).
 

Finally, a good selection of investment vehicles must take into account the level of risk, fees (particularly for unit-linked products), and sectoral or geographic diversification. Insurers generally offer a built-in search tool to guide investors in their choices.