HomeFINANCEessential guide to monetizing savings

essential guide to monetizing savings

Capitalization insurance is a way to monetize your savings with attractive interest and income tax rates. Find out how they work.

You capitalization insurance are financial investments with the legal format of Life Insurance. are intended for long-term savings application may benefit from more favorable taxation if held for more than five years and one day. They can have one-time or scheduled deliveries.

Despite having a capital guarantee from the start, as they are not covered by any guarantee fund, such as term deposits, the reimbursement of the capital invested depends on the solvency of the insurance company. They therefore have some associated risk.

Marketed by insurance companies and, therefore, also sold by financial institutions, they are a financial product suitable for those who want to save in the long term, with capital and minimum income guaranteed at reduced risk.

Capitalization insurance: how does it work?

Capitalization insurance are financial products intended for the application of savings with reduced risk, with guaranteed capital and may or may not have a guaranteed minimum return.

In this financial product, the insurer undertakes to pay a fixed amount at the time of contracting in exchange for the payment of a single or periodic premium. That is, you can make a single delivery, or make scheduled periodic deliveries.

Note that, in addition to guaranteeing the majority of the invested capital in the event of life, a capitalization insurance also guarantees the payment of the invested capital and the respective remuneration to the beneficiaries in the event of death.

The capitalization insurance contract

To take out capitalization insurance, you must take out an insurance policy and name your heirs or beneficiaries in the event of death.

In fact, capitalization insurance, like all other insurance, involves a contract between the parties. That is, between the insurer and the policyholder, the person who signs the contract and will pay the premium due.

The contract, which is nothing more than an insurance policy, also includes:

  • The beneficiary, that is, to whom the invested amount will be paid;
  • The premium, ie the amount delivered by the policyholder and its frequency;
  • The return on the amount invested;
  • The applicable taxation;
  • The redemption conditions;
  • Possible delivery and redemption commissions.

The profitability of capitalization insurance

Capitalization insurance is normally associated with two types of remuneration:

  • Guaranteed profitability: have a guaranteed annual interest rate, which may vary on the policy renewal date;
  • Insurer profit sharing: some capitalization insurances also have a variable component in their remuneration associated with the insurance company’s annual profit.

The capital guarantee is given by the insurer itself

The policies contain the information that these insurances have guaranteed capital. That is, on the due date, the amount you have invested will be refunded to you. However, the guarantee on the capital invested is given by the insurer itself. Thus, if the insurer goes bankrupt, it may lose the capital invested.

In other words, unlike term deposits, for which, within the defined limits, the deposited amount is guaranteed by the Deposit Guarantee Fund, this does not happen with the capital invested in capitalization insurance.

For this reason, capitalization insurance has some associated risk.

tax advantages

As a financial product intended for medium and long-term savings, capitalization insurance enjoys IRS headquarters tax advantages from the fifth year and one day, if 35% of deliveries have been made in the first half of the insurance period.

Thus, once this assumption has been met, under the terms of paragraph 3 of article 5 of the CIRS, the income obtained is subject to a fee of:

  • 28% if you redeem up to the fifth year;
  • 22.4% if the redemption is made between the fifth and eighth years;
  • 11.25% if redemption is made after the eighth year.

Ie, the later you redeem the amount invested, the greater your net income.

Remember that for the IRS rates to be lower from the fifth year onwards, you must have made 35% of the total deliveries in the first half of the contract. Otherwise, the release rate of 28% is applied to the total income


Capitalization insurance is a product that can be redeemed at any time, in whole or in part. However, you may have to incur a redemption fee. This information is included in the product subscription contract, which you should read carefully.


Capitalization insurance falls under the category of financial insurance, a category that also includes insurance linked to investment funds, called unit link.

Although they fall into the same category, the two products have different characteristics.

While capitalization insurance is normally associated with an annual return and guaranteed capital, this is not the case with unit link. These are associated with investment funds and, therefore, the investment risk is assumed, in whole or in part, by the policyholder, and there may be no income or even loss of the invested capital.

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