Obtain income, grow capital or speculate on the stock market: life insurance meets all of these objectives. It is also an investment perfectly suited to preparing for retirement, thanks to 100% secure savings for the part invested in the fund in euros, and with two big advantages compared to the PER: the money can be recovered at any time. instant (no blocking until retirement), and the heirs will not pay, most of the time, any inheritance tax, regardless of the age of death of the policy subscriber.
Taxation ? Of course, there is no entry bonus, but after eight years, capital gains and interest largely – or even entirely – escape tax, which is often more beneficial.
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Taxation
The system in force is very favorable to policyholders, especially after the eighth year. Even though it was reformed in 2018, the life insurance tax regime remains very attractive, especially after eight years. However, two situations must be distinguished in the event of an outflow of money. For payments before September 27, 2017, winnings are subject to income tax or, as desired, to a tax whose amount varies depending on the age of the contract. Knowing that, after eight years, an annual reduction of 4,600 euros – 9,200 euros for a couple – is applied to the earnings withdrawn, allowing in the majority of cases to avoid tax (the 17.2% deductions social benefits remain due).
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For payments made from September 27, 2017, in addition to social security contributions at 17.2%, the gains are this time taxed flat rate at 12.8% or, as desired, income tax, but again , after eight years, the reduction of 4,600 or 9,200 euros reduces or eliminates the tax. Beyond the reduction, winnings are subject to a tax of 7.5% (12.8% for the portion of payments greater than 150,000 euros) or to income tax.
To note that very old contracts, opened before 1983, are no longer 100% tax exempt. Gains from sums paid there since January 2020 are now subject to the current taxation of contracts over eight years old.
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Succession
Unbeatable advantages if the contract was funded before the age of 70. Significant advantages reduce the inheritance tax bill that the heirs of the contract have to pay. For payments made before the subscriber turns 70, each of the designated beneficiaries will pay nothing to the State up to 152,500 euros of capital received, then beyond this sum, will be taxed between 20 and 31.25%. For payments after the age of 70, the legislator has been less generous: the tax reduction provided is only 30,500 euros (the earnings earned are, however, never taxed), and it applies to all beneficiaries of the contract , who will therefore have to share it between themselves. Beyond this reduction, the amounts received will be subject to the usual inheritance tax.
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Manual
Deposits and withdrawals of money can be made at the desired pace. Current contracts are almost all with free payments: whether you opt for a classic insurer (Axa, Aviva, Generali, etc.) or one operating only on the Internet (Boursorama, Linxea, Placement Direct, etc.), you will be able to fund the contract at the pace and with the desired amounts.
Only drawback: in order to optimize taxation, it is better not to touch your savings for eight years. But this is not blocked: the insured can recover it at any time (within ten days), either in capital, withdrawn in one or several installments, or in annuity, which will be, as desired, served for life or for a specific period, for example fifteen years.
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Choice of establishment
100% Internet banks and associations stand out. More than 75% of life insurance outstandings are managed by counter banks and insurance firms, but these establishments rarely stand out for the quality of their offer. You will find much better among savings associations and mutual societies, such as Agipi, Asac-Fapes, GMF, Maif, or La France Mutualiste, whose contracts yield between 2 and 2.20% per year. Life insurance from online banks and Internet brokers is also more efficient.
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A signals that more and more establishments are restricting access to their funds in euros, requiring that with each payment a minimum of savings (from 25 to 50% of the stake) be placed in unguaranteed funds, focused in particular on the Stock Exchange. This is not the case with the contracts in our selection: not only do they have a quality euro fund, but, with some exceptions, you will be able to store your savings there without limitation.
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Investment method
The portion invested in the stock market must be reduced from the age of 55. Thanks to the diversity of supports offered, a contract allows an insured person to increase their savings according to the length of time separating them from retirement. When this horizon is distant (more than fifteen years), it is long-term investments, particularly equity funds, that he should favor. Of course, with the stock market, we are never safe from a fall in prices, but statistics prove that, over ten years, the performance of shares is always positive. As retirement approaches (around age 55), rather than increasing your capital, it is securing it that takes precedence. Hence the need to increase the share of the fund in euros or that of low-volatility real estate funds, such as SCPI. Most insurers can take care of this, through automatic arbitration.
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Delegated management
Specialists will manage your contract at a low cost. Many policyholders do not take the trouble to manage their contract. They have a ready-made solution: entrust its management to experts. All they need to do is define an investment strategy with the insurer, based on a risk profile (prudent, balanced or offensive). It is then specialized companies, such as Amundi, Fidelity or Rothschild, which invest the savings on the markets, in compliance with the set orientation. The cost of the service is modest: it takes the form of an increase in contract management fees, ranging from 0.10 to 0.20% per year. As for the entry ticket, it starts at 100 euros and does not exceed 1,000 euros.
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The rules for taxing interest and capital gains when withdrawing money
The 2018 reform only marginally modified the principle of taxation of life insurance: in the event of withdrawal of money, the share of the winnings remains little taxed after eight years, or not at all if these winnings do not exceed the reduction of 4,600 euros per year (9,200 euros for a married or civil partnership couple). Attention, in addition to the tax rates, it is necessary, each time, to add 17.2% of social security contributions (also due at the end of the year on the euro fund, even if no withdrawal has been made).
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Capital
(1) Gains from payments of less than 30,490 euros made between 26.9.1997 and 31.12.1997 are exempt from tax. (2) Payments made since January 2020 on a contract opened before January 1983 are now subject to the current taxation of contracts over eight years old. (3) This limit of 150,000 euros (double for a couple) applies to all open life insurance and capitalization contracts, and not per contract. (4) The income tax option, if chosen, applies when submitting the tax return. In the event that the amount of tax collected (at 7.50 or 12.80%) turns out to be greater than the tax due, the excess is returned. (5) The tax deduction on earnings from the contract is 4,600 euros per year for a single person (single, divorced, etc.) or 9,200 euros for a married or civil partnership couple.
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2024-02-15 09:36:58
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