Alexa Seleno

Life insurance contracts: who are they for?

Juil 10, 2023
Life insurance contracts: who are they for?

Statistical studies carried out on life insurance reveal an interesting phenomenon: the proportion of households holding at least one contract increases with age. Retirees are the best equipped, while young people still hold few life insurance policies. Explanations.

Life insurance to prepare for the future of children and grandchildren

Life insurance can be taken out by any Physical personwhether minor or major. Parents and grandparents may thus wish that a savings contract be taken out in the name of their children and grandchildren from birth, during their childhood or adolescence. The savings reached on the contract may allow, for example, to finance and materialize the children’s projects, such as the payment of tuition in a school or university, the cost of student lifelearning and the passage of driver’s license or even the contribution of part of the capital necessary for a property purchase. A list that is obviously not exhaustive!

The advantage of subscribing to a life insurance contract from a very young age is on the one hand, to take a date with regard to the taxation of life insurance applicable in the event of redemption, on the other hand to smooth the savings effort over several years and thus to allow, depending on his personal and financial situation and his appetite for risk, to diversify the allocation of the payments made between the different supports offered by the life insurance contract. Indeed, most of the contracts offered on the market are so-called multi-support life insurance contracts which offer both a euro fund and unit-linked supports.

Remember that the insurer only commits to the number of units of account, and not to their value, which can fluctuate up or down depending on the evolution of the financial markets. The saver alone bears the risk of capital loss.

Take out a life insurance policy during your working life

The income received during the working life of an employee or a self-employed person is used to fund one or more life insurance policies held with the same insurance company or with several different establishments. In particular, it is possible to choose to save regularly small sums in order to gradually build up financial assets. Scheduled payments have the advantage of reduce stress savings.

If your income is not regular, especially if you are the manager of your own company, or if you receive a substantial inflow of money (donation, inheritance, real estate sale, etc.), you can also make a payment at any time on your life insurance policy.

Whatever your preferences, holding a life insurance contract during your professional career allows you to anticipate the effects of your retirement and the reduction in the level of income that is intimately associated with it.

Retirement ? It’s not too late to take out life insurance

It is preferable to take out a life insurance policy as soon as possible in order to set the date and take advantage of the tax advantages of this type of investment. However, if you are retired and do not yet have a life insurance contract, there is still time. Indeed, the taxation on redemptions made on this type of contract is reduced as of the eigth year detention

Here is a summary table of taxation in the event of redemption which illustrates this point:

  • Enjoy the advantageous taxation life insurance in the event of redemption on 01/01/2021: the table below allows you to quickly view the taxation applicable in the event of redemption which takes place in two stages.
  • Table of taxation in the event of redemption/at term for French tax residents excluding social security contributions:
  • NWFP: flat-rate non-discharging levy
  • PFU: single flat-rate direct debit
Lifetime of the contract Rules applicable in N: year of collection Rules applicable in N + 1
Premiums paid from 27/09/2017 Premiums paid from 27/09/2017
At least 8 years old NWFP of 7.5% Sum of premiums paid less than €150,000 PFU of 7.5% or on the progressive scale global option Application of the allowance of €4,600 or €9,200 (1) Sum of premiums paid greater than or equal to €150,000 PFU of 7.5% on a fraction of income (2) or 12.8% or on the global progressive scale option Application of the allowance of €4,600 or €9,200 (1)
Up to 8 years old NWFP of 12.8% PFU of 12.8% or, on global option, progressive scale

  • (1) The allowance applies in priority to products attached to premiums paid before 09/27/2017, then to products attached to premiums paid from this date, on those taxable at the rate of 7.5% then on those taxable at the rate of 12.8%
  • (2) On the fraction covered by the 7.5% rate: the pro rata is determined by applying the following quotient: €150,000 (reduced by the amount of premiums paid before 09/27/2017, net of reimbursements)/amount of premiums paid from 09/27/2017 (net of
  • refunds).
  • The social security contributions of 17.2% of the products, deducted at source, are deducted by the insurer on redemption and are added to the taxation described in the table above.

Another point raised by retirees: taxation in the event of death You have under 70 ? Take the opportunity to invest your capital in your contract. Indeed, the amount of the capital paid by the insurer will be exempt from inheritance tax within the limit of €152,500 per beneficiary. You have over 70 years old ? You can still fund your contract. Although revised downwards, the tax advantage linked to the transmission of paid-up capital after age 70 is still €30,500.

Good to know : whether the capital was paid before or after the insured’s 70th birthday and whatever the amount, they are entirely exempt from inheritance tax for the surviving spouse or PACS partner.

  • Here is a summary presentation of the taxation in the event of death on 01/01/2021
Age at time of payment Article 990 I of the CGI / Article 757 B of the CGI Social contributions
Under 70 Capital is taxed:

– 20% beyond an allowance of 152,500 euros per beneficiary,

– At 31.25% above 852,500 euros per beneficiary

Social security contributions of 17.2% of products deducted at source
Over 70 years The payments made are subject to transfer duties free of charge when their total exceeds 30,500 euros on all of the subscriber’s life insurance contracts.

Some details for reading this table:

Basis of the levy of article 990 I of the General Tax Code:

The sample is seated:

– for the redeemable fraction of the subscription: on the part of the death benefit corresponding to the premiums paid before the insured person turns 70,

– for the non-redeemable portion of the subscription: on the amounts of the premiums paid under the provident cover before the insured’s 70th birthday.

This abatement of 152,500 euros is applicable per beneficiary but is assessed for all contracts combined on the head of the same insured (article 990-I of the General Tax Code).

Case of exemption:

The 20% or 31.25% deduction is not due when the death benefits are paid, as beneficiaries, to the spouse of the insured, to his partner bound by a PACS, or to his brothers and sisters from when the latter meet the conditions set by article 796-0 ter of the General Tax Code.

Beneficiaries having the status of surviving spouse, partner bound by a PACS, or brothers and sisters fulfilling the conditions laid down by article 796-0 ter of the General Tax Code, are exempt from inheritance tax. In the event of multiple beneficiaries, the share due to the aforementioned persons, exempt from inheritance tax, is not taken into account to distribute the allowance of 30,500 euros between the various beneficiaries.

Life insurance: a contract that evolves with you

Life insurance contracts have a notable specificity: they make it possible to to share out payments made between several categories of media. Policyholders can thus invest in consistency with the level of risk and volatility they accept, their age and financial situation and their investment horizon. Better yet: they can do evolve the distribution of their savings throughout their lives. The life insurance contracts marketed by Sicavonline fully integrate this possibility. Thus, the first 15 arbitrations realized on the KOMPOZ contract in free management are free (1% of the amount arbitrated beyond), while the arbitration fees on the life insurance FUTURA VIE are 0.10% of the amount arbitrated with a ceiling €10 per operation.

The life insurance contract is a long-term investment. The duration of a life insurance contract, the amount of premiums paid and the characteristics of the contract chosen depend in particular on the financial situation of the subscriber, his needs and objectives, his attitude towards risk and the plan. applicable tax. He is therefore invited to seek advice.

Like many financial investments, life insurance is a complex and risky product because the investment can be made mainly in units of account. Indeed, this type of support presents a risk of capital loss and this is not guaranteed, because it depends on the upward and downward fluctuation of the financial markets. In addition, past performance is not indicative of future performance.

Legal Notice

SICAVONLINE, public limited company with capital of €4,000,008. RCS Nanterre 423 973 494.

Head office: Village 5 – 50 place de l’Ellipse, CS 50053, 92985 PARIS LA DÉFENSE CEDEX.

Such. : 01 70 08 08 08.

Investment Services Provider approved by the Prudential Control and Resolution Authority under number 19 253 CE.

Insurance brokerage company and intermediary in banking operations and payment services, registered with ORIAS under number 18001256.

KOMPOZ is a collective life insurance policy insured by Ageas France and marketed by Sicavonline, as an insurance broker. The subscriber of the KOMPOZ contract is the Personaliz Epargne Digitale association, become a member of the association and join the KOMPOZ contract.

Ageas France
Limited life insurance company. Company governed by the Insurance Code, approved by the Prudential Control and Resolution Authority, with capital of €159,221,273.61. Registered in the Nanterre Trade and Companies Register at number 352 191 167, whose registered office is located at Village 5 – 50 place de L’Ellipse – CS 30024 – 92985 Paris La Défense Cedex.

Futura Vie is a multi-support type individual life insurance policy insured by ORADEA VIE and marketed by Sicavonline, as an insurance intermediary.

ORADÉA VIE, limited liability life insurance and capitalization company with capital of EUR 26,704,256.
Company governed by the insurance code 430 435 669 RCS NANTERRE.
Head office: Tower D2 – 17 bis place des Reflets – 92919 Paris La Défense Cedex

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