THE ESSENTIALS
Before you start
- A percentage needs a charging basis, a date and a frequency.
- Compare total costs without counting a charge already included twice.
- The mathematical example explains compounding and does not forecast a product.
Information about the total cost
Article 40 of the regime annexed to Portuguese Law 7/2019 requires aggregated information on costs and charges and their cumulative effect on returns for insurance-based investment products. Clients may request an itemised breakdown. Information about these costs must be provided at least annually during the investment. The sources link to the consolidated text.
Make three columns before comparing
In the first column, record your contribution and how much is actually invested. In the second, list recurring charges, their fixed or percentage basis and when they are taken. In the third, record exit costs at the term you are considering, including an earlier exit. Mark anything the documents leave unclear.
Ask the distributor which charges are already reflected in the figures shown. Adding a fee again when a projection already includes it can distort the comparison. Equally, an annual percentage and a one-off payment should not be listed as though both recur throughout the contract.
A small annual difference can accumulate
Purely mathematical example: EUR10,000 growing at 3% a year for ten years would become approximately EUR13,439; at 2%, approximately EUR12,190. The difference is about EUR1,249. This assumes constant rates and annual compounding, with no additional contributions, tax or other charges.
These fictional growth rates are neither available offers nor promised returns. They also do not automatically model a 1% fee: its effect depends on the charging basis and timing. The example shows why comparing final amounts under matching assumptions is useful alongside examining an individual percentage.
Ask both proposals the same question
Request a table using the same contribution, payment calendar and term, clearly identifying included and excluded costs. If you may need the money earlier, request an exit illustration for that date as well. Separate the effect of charges from investment movements and applicable taxation.
At your annual review, compare the report with the documents retained and record specific changes or questions. Lower cost alone does not establish suitability: risk, access to money and objectives still need assessment. Use this RMACHADO guide to prepare questions for an authorised distributor; it makes no individual recommendation or subscription proposal.
KEEP THESE QUESTIONS
Your checklist for the next conversation
- Contribution and amount invested identified.
- Basis, frequency and timing of every charge.
- Total and itemised costs requested under matching assumptions.
- Early exit and costs already included in projections identified.
- Annual report and contractual documents retained.
FROM THE ARTICLE TO YOUR SITUATION
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Sources and transparency
Content updated on .
Consultation dates are stated in individual references when available.
Numerical examples are fictional and explain concepts. Editorial interpretations are identified in the text.
Information from RMACHADO GROUP. This is not an insurance offer or individual advice. Covers, acceptance, exclusions, sums insured and costs depend on the policy. The intermediary does not underwrite the risks.