Why take out a life insurance policy?

An investment appreciated by the French, life insurance can be relevant, whether you want to finance a medium-term project or prepare for your retirement. Life insurance has many advantages: reduced taxation, secure transmission of capital or the possibility of transforming capital into a life annuity. We will explain everything to you !

The benefits of life insurance

What is the principle of life insurance?

Life insurance is a contract by which the insurer undertakes, in return for the payment of premiums, to pay annuities or capital to the insured or his beneficiaries. It can be used as a savings for medium or long term.

At the end of the contract, the insured or his beneficiaries can recover the sums invested, increased by any gains and reduced by the costs (notably of administration and management).

After opening the contract with an initial payment, it is possible to make payments, regular or not, with no limit on the amount. Even if it is fiscally more interesting to save for at least 8 years, you have the right to terminate your contract or make withdrawals at any time.

The benefits of life insurance

Life insurance offers many benefits.

It allows to build capital over the long term. After a few years, you can withdraw your capital, i.e. close your contract and withdraw the money deposited, plus net interest. Attention ! You are not guaranteed to get back your entire bet if you invest in units of account (UC).

It also offers the possibility of additional income, especially for retirement, through regular withdrawals or the conversion of your capital into a life annuity.

Finally, life insurance is an excellent tool for transmission of inheritance thanks to advantageous taxation and great freedom in the choice of beneficiaries.

Life insurance: what taxation?

Interest from payments made since September 27, 2017 on your life insurance policy is subject to the single flat-rate  debit named social contribution (PFU).

THE social contribution is debited during partial or total withdrawal amounts available on your life insurance contract.

For a withdrawal on a contract of life insurance after an 8 years opening, the one-off flat-rate debit amounts to 7.5% for sums paid less than €150,000.

For a withdrawal from a life insurance contract before an  8 years  opening, the single flat-rate debit amounts to12.8%.

Finally, at single lump sum direct débitais added 17.2% of social contributions.

How do you make money with life insurance?

A contract of life insurance is a tax envelope that can be considered as a toolbox.

There are Mutual Funds Or FCP which are composed of various stocks and/or bonds. 

In France you cannot put plain stocks Or bonds in a life contract but only funds.                     

For more information see the section   investment strategies   .