Review on the 3rd pillar Generali Scala Capital
Type of 3rd pillar:
Life insurance linked to investment funds, available as pillar 3a and 3b.
The third pillar Scala Capital is a product that, in our opinion, is located in the range of products oriented to safety, putting the expectation of returns in the background. The product offers a guaranteed final capital of approx. 80% of the total amount of premiums paid (depending on the duration of the contract) and, unlike other products linked to investment funds, the redemption value is guaranteed throughout the duration of the contract.
To achieve a return, the Scala Capital product uses investment funds, and consequently the return is subject to normal market volatility.
It must be said that, in the range of products with investment funds offered by the Generali insurance company, Scala Capital is the most conservative product and therefore also the return expectation cannot be very high (about 2.25% declared as a medium scenario).
A very interesting point is given by the possibility of privileged withdrawal in case of purchase your primary property, which is not normally offered in this type of product. In practice, if you want to use the assets of your third pillar to finance the purchase of your primary home, you will have a higher value than the normal surrender value.
To avoid risks towards the end of the contract, Generali gradually reallocates your capital into more conservative and less risky funds, so as not to have large fluctuations in value at such an important moment.
Attention: as already explained, the guaranteed capital is lower than the amount you paid, so the final capital may be higher or lower than the sum of the premiums paid, depending on the actual performance of the investment funds.
In addition to retirement savings, Generali Scala Capital allows you to include coverage in the event of disability and death typical of a third insurance pillar, in order to protect your income and your family in times of difficulty.
Regarding flexibility, and like most products for the third pillar, Generali Scala Capital offers the possibility to increase or decrease the premium, make additional payments, switch from pillar 3a to pillar 3b, or to release the contract from payment of premiums.
- Minimum guaranteed capital on maturity.
- Guaranteed surrender value over the entire term.
- Privileged withdrawal in case of purchase of primary residential property.
- The expected performance, given the conservative nature of the product, is rather low (under current conditions).
To conclude, we can say that Generali Scala Capital is a product that possesses the classic characteristics of a third insurance pillar linked to investment funds, and represents a valid alternative for those looking for a safety-oriented product, without major returns. Of course, as with all retirement products, your satisfaction will largely depend on the quality of the advice.
How to recognize a good advice?
Here are some points to watch out for:
1) Is the consultant registered to FINMA intermediaries register?
2) Does the intermediary know how to explain in detail how the product works?
3) Did they offer you alternatives?
4) Has it been explained to you that, in addition to gains, there may also be losses?
5) Was the offer made taking count your current coverage from the first and second pillar?
6) Did the intermediary leave you the complete offer and the time to evaluate it?