A financial investment much appreciated by the French, life insurance is aimed at all individuals who wish to save and make their capital grow for the realization of a specific project. At the end of the contract, the insured can thus recover his funds (with interest) to then embark on other investments.
First of all, it is good to know that life insurance and death insurance are completely separate areas. In the case of death insurance, the contract opened in the name of the insured will be terminated upon the death of the latter. Then, the capital and interest will go to the beneficiaries designated by the subscriber. How exactly does a life insurance policy work?
Understand the principle of a life insurance contract
In a life insurance contract, the insured fully undertake to pay capital for 8 years, and in return, they receive premiums. The funds invested can be used as a savings product, in the medium or long term. Payments can also be made regularly or not, depending on the choice of the insured. Of course, they have the right to make withdrawals at any time. Similarly, they can also terminate their contracts at any time. In short, the holders of a life insurance contract can opt for free or delegated management, and they have the possibility of taking out automatic management options to make their investment a success.
The objectives of life insurance
Whether in single-unit contracts in euros or multi-unit contracts, life insurance aims first and foremost to help savers build capital over the long term. Then, it also aims to supplement the income of the insured, when they are retired or when they want to make regular redemptions, life annuities, or even advances. Finally, life insurance is a good instrument for transferring wealth. While benefiting from advantageous taxation, it allows policyholders to freely pass on their capital to their relatives (the beneficiaries of the contract).
Everything you need to know about the fees to be paid in a life insurance policy
To enable policyholders to better manage their insurance contractslife insurancethe fees to be paid in this type of investment are as follows:
- Fixed administrative fees to be paid at the time of subscription to the contract.
- Entry fees deducted during the payments, at the opening or during the course of the contract. These costs are fixed or proportional to the amount of the sums paid each time.
- Management fees charged throughout the contract.
- Arbitration fees levied on the amount of money that is transferred from one unit of account to another. These fees are fixed or proportional to the transferred funds.
What he says about taxation
Holders of a life insurance policy will benefit fromincome tax exemption, only if they do not touch their contracts for 8 years. After this period, taxation is even more attractive, given that the final levy is set at a rate of 7.5% with an annual allowance of 4,600 euros in interest.
