Why are some life insurance policies so bad?
Life insurance is the favourite investment of the French, with nearly 1,900 billion euros in assets in 2026. Yet all policies are far from equal. Behind the promise of a safe investment, millions of savers hold policies that cost them tens of thousands of euros in unnecessary fees, deliver mediocre returns, and limit their investment choices.
The problem is structural: traditional banks and certain insurance networks distribute policies designed to maximise advisor commissions, not saver returns. Entry fees, high management fees, and limited fund ranges are all handicaps that, accumulated over 20 or 30 years, can represent over 100,000 euros in lost returns.
In this article, we identify the objective criteria that distinguish a bad policy, we rank the worst policies on the market, and we give you the keys to take action if you're affected.
5 criteria to identify a bad policy
1. Entry fees above 0 %
Any policy charging entry fees should be avoided in 2026. This practice, once widespread, has become unacceptable given the competition from online policies that systematically charge 0 % entry fees.
When a bank charges 3 % on every contribution, it means that out of 10,000 euros contributed, only 9,700 euros are actually invested. Multiply that by regular contributions over 20 years and the cost becomes considerable.
2. Annual management fees above 0.60 %
The best policies on the market charge 0.50 % per year on unit-linked funds. Bank policies frequently go up to 0.80 %, or even 1 % per year. This gap of 0.30 to 0.50 % seems minor, but on a 100,000 euro capital, it represents 300 to 500 euros in additional fees every year, not counting the compounding effect.
3. Euro fund return below 2.50 %
In 2024 (the latest available figures), the best euro funds delivered between 3 % and 4.50 % net of management fees. A euro fund that doesn't exceed 2 to 2.50 % is clearly below market and reflects either mediocre financial management or excessive management fees eating into the gross return.
4. Fewer than 100 unit-linked funds available
A modern policy should offer a diverse range of unit-linked funds: OPCVM, ETFs, SCPIs, SCIs, OPCIs, and even private equity. The best policies offer 700 to 2,300 funds. A policy with only 30 to 50 funds is a barrier to diversification and performance.
5. Switching fees that aren't free
Switching (transferring between funds within the policy) should be free and unlimited. Policies that charge 0.50 % to 1 % per switch discourage savers from rebalancing their allocation, which harms long-term wealth management.
A single criterion is enough to disqualify a policy
If your policy has even one of these flaws, it deserves to be reconsidered. But most bad policies accumulate several of these handicaps, making them major obstacles to building your wealth.
Ranking of the worst life insurance policies in 2026
Traditional bank policies: the big losers
The vast majority of policies distributed through bank branches have excessive fees and a limited investment range. This is no accident: the business model relies on commissions earned by the distribution network, and these commissions are directly funded by the fees you pay.
| Policy | Entry fees | Unit-linked mgmt fees | Euro fund 2024 | Number of funds | Score |
|---|---|---|---|---|---|
| Predissime 9 (Credit Agricole) | Up to 3 % | 0.85 % | ~2.20 % | ~50 | 4/10 |
| Sequoia (Societe Generale) | Up to 3 % | 0.85 % | ~2.10 % | ~40 | 3.5/10 |
| Floriane 2 (CIC/Credit Mutuel) | Up to 2.50 % | 0.80 % | ~2.50 % | ~70 | 4.5/10 |
| Lbp Prevoyance (Banque Postale) | Up to 3 % | 0.90 % | ~2.00 % | ~30 | 3/10 |
| Multi Vie (AXA branch) | Up to 4.50 % | 0.96 % | ~2.30 % | ~60 | 3/10 |
| Vie Generali (Allianz network) | Up to 3.50 % | 0.85 % | ~2.20 % | ~50 | 3.5/10 |
| Groupama Modulation | Up to 3 % | 0.80 % | ~2.00 % | ~40 | 3.5/10 |
Comparison with the best policies on the market
To measure the size of the gap, here are the same criteria applied to the market leaders:
| Criterion | Typical worst policy | Linxea Spirit 2 | Lucya Cardif |
|---|---|---|---|
| Entry fees | 3.00 % | 0 % | 0 % |
| Unit-linked fees / year | 0.85 - 1.00 % | 0.50 % | 0.50 % |
| Switching fees | 0.50 - 1.00 % | 0 % | 0 % |
| Euro fund return 2024 | 2.00 - 2.30 % | ~3.13 % | ~3.00 % |
| Number of funds | 30 to 70 | ~700 | ~2,300 |
| ETFs available | 0 to 5 | ~40 | ~70 |
| SCPIs available | 0 to 3 | ~30 | ~20 |
The real impact of fees: 20 and 30 year simulations
Fees seem insignificant when expressed as an annual percentage. But their real impact, amplified by compounding, is devastating over the long term. Let's take a concrete example.
Scenario: a saver investing 200,000 euros
Common assumptions: 5 % gross annual return (before policy fees), 20 and 30 year horizons.
| Element | Traditional bank policy | High-performing online policy |
|---|---|---|
| Initial capital contributed | 200,000 EUR | 200,000 EUR |
| Entry fees | 3 % = 6,000 EUR deducted | 0 % = 0 EUR deducted |
| Capital actually invested | 194,000 EUR | 200,000 EUR |
| Net annual return (after mgmt fees) | 4.15 % (5 % - 0.85 %) | 4.50 % (5 % - 0.50 %) |
| Capital after 20 years | 434,758 EUR | 481,652 EUR |
| Capital after 30 years | 663,410 EUR | 753,983 EUR |
| Difference at 20 years | -46,894 EUR | Reference |
| Difference at 30 years | -90,573 EUR | Reference |
90,000 euros lost in 30 years
Over 30 years, the gap reaches nearly 91,000 euros. This amount represents only the impact of the fee difference between a traditional bank policy and a high-performing online policy. It doesn't even account for the switching fees you might incur or the potential euro fund underperformance.
What if we add regular contributions?
Now imagine a saver who also contributes 500 euros per month for 25 years to their policy. With the same return assumptions (5 % gross) and the same fee gaps:
- Bank policy (3 % entry fees, 0.85 % management): final capital of approximately 455,000 EUR
- Online policy (0 % entry fees, 0.50 % management): final capital of approximately 520,000 EUR
- Gap: approximately 65,000 EUR in lost returns, solely due to fees
Combining initial capital and regular contributions, a saver who keeps a bad policy for 25 to 30 years can easily lose between 100,000 and 150,000 euros compared to an optimised policy. That's the price of silence and inaction.
Why do banks sell such mediocre policies?
The network compensation model
Entry fees are the primary source of income for bank advisors on life insurance products. A 3 % entry fee on a 50,000 euro contribution generates 1,500 euros in immediate commission. This model creates an obvious conflict of interest between the banker's advice and the saver's interest.
Deliberately limited fund ranges
Banks favour their own in-house funds in the available fund range. These internal funds generate additional fees (the fund's own management fee, often 1.5 to 2.5 % per year) that are added to the policy fees. The saver therefore bears a double layer of fees.
The proximity argument
Banks justify their high fees through the support of a branch advisor. But this advisor frequently changes positions, often has only basic life insurance training, and is subject to sales targets that are not aligned with your interests. In reality, a good online policy with clear documentation and responsive customer service offers better support.
Warning signs: is your policy a bad policy?
Here are the concrete signals that should alert you:
Fee warning signs
- Your annual statement shows entry fees above 0 %
- Annual management fees exceed 0.60 % on unit-linked funds
- You pay fees for every switch (fund change)
- Exit fees apply during the early years
- Your policy includes penalties for full withdrawal
Performance warning signs
- Your euro fund return is below 2.50 % net in 2024
- Your allocation's performance has been below that of a simple MSCI World ETF over the last 5 years (adjusting for risk profile)
- Your advisor is unable to provide a comparison with competing policies
Fund range warning signs
- You cannot find any ETFs in the available fund list
- SCPIs are not accessible from your policy
- Almost all available funds bear your bank's logo
- The total number of funds doesn't exceed 100
How to check
Log into your client area and consult your detailed annual statement. Management fees are mandatory disclosures. Then compare your euro fund return with the published performance of the best online policies (Linxea Spirit 2, Lucya Cardif, Boursorama Vie). If the gap exceeds 0.5 percentage points, it's time to act.
What to do if you have a bad policy
Option 1: Open a new policy in parallel
The simplest and fastest solution is to open a new policy with an online broker (Linxea, Assurancevie.com, etc.) while keeping your old policy. You redirect your future contributions to the new policy and let the old one continue with the capital already invested.
Advantages: You preserve the tax seniority of your old policy (the 8 years are already acquired). No tax to pay. Quick process (online opening in 15 minutes).
Disadvantages: Your old capital continues to suffer from high fees.
Option 2: Partial or full withdrawal
You can withdraw all or part of the capital from your old policy to reinvest in a better one. This has tax consequences you need to plan for:
-
Policy over 8 years old: You benefit from an annual tax-free allowance of 4,600 euros (single person) or 9,200 euros (couple) on capital gains. Beyond that, the flat tax of 30 % applies, or the progressive income tax scale if more favourable.
-
Policy under 8 years old: The 30 % flat tax applies on capital gains (12.8 % income tax + 17.2 % social contributions). It may be better to wait until 8 years if the date is near.
Option 3: PACTE law transfer (for PERs)
Since the 2019 PACTE law, it is possible to transfer a PER (retirement savings plan) from one institution to another while preserving tax seniority. This option is very attractive for bank PERs with excessive fees.
However, for standard life insurance, transfers between insurers do not yet exist in 2026. A bill is regularly discussed but has yet to materialise. The only solution remains withdrawal followed by reinvestment.
Option 4: Fee negotiation
If you insist on staying with your bank, you can try to negotiate your policy fees. Request in writing the elimination of entry fees and a reduction in management fees. Some banks will agree to lower entry fees to 0 % for wealth clients, but management fees are rarely negotiable as they are set in the policy's general terms and conditions.
Don't stay out of inertia
Status quo bias is the saver's number one enemy. Every year spent with a bad policy costs you money. Even if the switching process seems tedious, it takes just a few hours and will save you tens of thousands of euros over the long term.
Recommended alternatives
Linxea Spirit 2: the benchmark for self-directed savers
Underwritten by Spirica (Credit Agricole Assurances), Linxea Spirit 2 offers 0 % entry fees, 0.50 % annual management fees, nearly 700 unit-linked funds (including approximately forty ETFs and thirty SCPIs/SCIs/OPCIs), and a euro fund at approximately 3.13 % in 2024. It's the ideal policy for investors who want to manage their own allocation with maximum flexibility.
Lucya Cardif: the widest range on the market
Underwritten by BNP Paribas Cardif (Europe's leading life insurer), Lucya Cardif offers the same fees as Linxea Spirit 2 (0 % entry, 0.50 % management) with the widest range on the market: approximately 2,300 unit-linked funds, including 70 ETFs. The euro fund delivered approximately 3 % in 2024. An excellent choice for savers who want maximum diversification backed by a top-tier insurer.
Boursorama Vie: the online banking compromise
For those who want to remain within a complete banking ecosystem, Boursorama Vie (underwritten by Generali) offers 0 % entry fees, 0.75 % unit-linked management fees, and approximately 470 funds. It's a good compromise between the simplicity of an online bank and reasonable fees, although higher than Linxea Spirit 2 or Lucya Cardif.
Optimal strategy: combining 2 to 3 policies
The best approach for a saver in 2026 is to hold 2 to 3 life insurance policies with different insurers. This strategy offers several advantages:
- FGAP protection: The French Insurance Guarantee Fund covers 70,000 euros per policyholder per insurer. Spreading your capital across multiple insurers maximises your coverage.
- Tax flexibility: Each policy has its own tax clock. You can optimise your withdrawals by choosing the oldest policy or the one with the lowest capital gains.
- Euro fund diversification: Each insurer has its own euro fund management policy. Diversifying insurers means diversifying risks.
Conclusion: act now
If you hold a bank life insurance policy with high fees, every day that passes costs you money. The fee gap between a bad policy and a good online policy can represent 50,000 to 150,000 euros over a saver's lifetime.
The process is simple: open an online policy (Linxea Spirit 2 or Lucya Cardif), redirect your future contributions, and evaluate the merits of a gradual withdrawal from your old policy. In just a few hours of effort, you can save the equivalent of a new car, or even a studio apartment. Don't let inertia cost you a fortune.